Lyft and Uber may reconsider their decision to cease operations in Minneapolis on May 1 due to a new minimum wage for rideshare drivers set to take effect on that day. This decision comes after the city council overrode the mayor’s veto and set a minimum wage of $15.57 an hour for rideshare drivers, prompting Uber and Lyft to announce their departure from the city. The council is now considering extending the effective date to July 1 to allow for further discussions and potential compromises on the minimum wage law, as well as to give new ride-hailing services more time to enter the market.
Both Lyft and Uber have expressed dissatisfaction with the minimum wage ordinance, with Lyft calling it “deeply flawed” and unsustainable for its operations, while Uber stated disappointment in being kicked out of the Twin Cities and leaving thousands of drivers without work. Mayor Jacob Frey has supported a minimum wage for rideshare drivers but opposed the ordinance because it did not take into account a Minnesota state study that analyzed appropriate pay rates for drivers. The ordinance mandates a minimum pay of $1.40 per mile and $0.51 per minute for rideshare drivers in Minneapolis, but a state analysis showed lower numbers of $0.89 per mile and $0.49 per minute.
Some council members are proposing an amendment to the ordinance, lowering the per-mile rate to $1.21 while maintaining the proposed per-minute rate of $0.51. They believe that this amendment will help accomplish their goals of ensuring fair wages for drivers, stability for both drivers and riders, and a healthy, competitive market. The proposal is set to be voted on at a council meeting, with indications that there are enough votes to enact the proposed delay to the effective date of the minimum wage law. Uber has expressed support for this delay, stating that it will allow them more time to work on a comprehensive statewide solution that raises pay across the state, protects flexibility, and keeps rides affordable.
The statement from Council President Elliott Payne and Council Members Katie Cashman and Aurin Chowdhury emphasized the importance of gathering information, consulting stakeholders, and making informed decisions when it comes to leadership. They believe that by amending the ordinance, they can achieve their goals of fair wages, stability, and a competitive market for rideshare services in Minneapolis. The proposed delay is seen as a positive step towards finding a solution that benefits both drivers and riders, as well as ensuring the sustainability of ride-hailing services in the city. Lyft has not yet responded to requests for comment on the proposed delay, but with the potential for the delay to be enacted, there is hope for a resolution that satisfies all parties involved.
