Uber and Lyft threaten to pull out of Minneapolis after city council vote
Uber and Lyft are threatening to pull out of Minneapolis after a city council vote there guaranteed a minimum hourly wage for drivers.
The council voted 10-3 on Thursday to override a mayor’s veto of an ordinance requiring ride-hailing services to pay drivers a minimum rate of $1.40 per mile and 51 cents per minute to ensure they receive the equivalent of the earning local minimum wage of $15.57. per hour.
The wage ordinance was first approved last week but was vetoed by Minneapolis Mayor Jacob Frey.
Both Uber and Lyft said they would stop operating in the city when the law takes effect on May 1. Uber added that it would leave the Minneapolis metro area, including the airport, making it the first metro area in the country without Uber’s presence.
The companies argued that they would be forced to pass on the higher costs to passengers, which would ultimately result in drivers earning less. In a statement, Lyft called the bill “deeply flawed,” adding, “This ordinance would make rides unaffordable for the majority of Minneapolis residents.”
The ordinance is the latest minimum wage law for gig economy workers, as tension grows between workers and gig companies over fair wages. In September, New York City required tech platforms like Uber, DoorDash and Grubhub to pay food delivery workers about $18 per hour. States like Washington and California, as well as cities like Seattle, have set minimum wage standards for gig workers over the years.
Critics of the Minneapolis bill include the mayor and Minnesota Governor Tim Walz, who vetoed a similar bill last year.
Supporters, such as city council member Jamal Osman, who co-authored the law, said that taxi services in Minneapolis rely heavily on drivers from low-income or immigrant communities.
The companies are expected to push for a state law that could overturn the Minneapolis ordinance. Last week, Minnesota state lawmakers suggested minimum wage standards for drivers who drive, at a rate slightly lower than what the city of Minneapolis has approved.