Uber, Lyft Threaten To End Service in Minneapolis Over Minimum Pay Ordinance

Uber and Lyft, two major rideshare companies, are on the brink of withdrawing their services from Minneapolis in response to a newly proposed ordinance aimed at raising the minimum wage for drivers.

Both companies are set to leave the Twin Cities at the start of May following the Thursday decision by the Minneapolis City Council, according to a report from local outlet Fox 9.

Rideshare Giants Echo Concerns Over Minneapolis Ordinance

(Photo : Michael M. Santiago/Getty Images)

In a statement, Uber expressed its support for a comprehensive statewide legislation that guarantees drivers a minimum earning while working.

The company emphasized the importance of protecting drivers' flexibility and independence in the process. However, it made it clear that if the ordinance in Minneapolis comes into effect, they would have no choice but to suspend operations.

Similarly, Lyft voiced its concern over the proposed ordinance, stating that if it becomes law, the company will have to cease operations in the city by May 1. The company emphasized the need for a more sustainable and thoughtful policy solution, urging collaboration with stakeholders to find a balanced approach.

"For the second time in less than a year, the bill-sponsors have willfully chosen to ignore offers to collaborate, instead choosing to rush through the most extreme figures possible," the statement reads. "We implore Mayor Frey to veto this legislation and instead join our efforts to pass a statewide minimum earnings standard that can balance the needs of all."

The move by Uber and Lyft echoes similar actions taken in other cities facing regulatory challenges.

In Austin, Texas, both companies temporarily pulled out following legislation requiring driver fingerprinting. However, other companies eventually filled the gap left by their absence, leading to their return to the market.

While Minneapolis joins cities like New York and Seattle in proposing minimum wage mandates for rideshare drivers, the decision has faced pushback from the industry. Nonetheless, operations have continued in those cities despite the regulatory hurdles.

Minneapolis Ordinance Ensures Minimum Pay for Rideshare Drivers

The ordinance in Minneapolis would guarantee that drivers receive a minimum of $5 for each completed ride and 80% of the fees for canceled rides.

However, both Uber and Lyft have raised concerns about the potential impact on service affordability and availability.

The Minneapolis City Council passed the ordinance with a 9-4 vote on Thursday.

Meanwhile, Minneapolis Mayor Jacob Frey announced on Friday that he vetoed the decision, yet the voting outcome indicates that the council might possess the necessary majority to override the veto.

Rideshare drivers have long advocated for minimum pay standards, citing the challenges of making ends meet amidst rising expenses. The proposed ordinance aims to address these concerns by establishing minimum earnings criteria for drivers.

While Uber and Lyft have issued warnings about ceasing operations, some council members remain hopeful for alternative solutions. The possibility of other companies entering the market or innovative taxi services stepping up could mitigate the impact of their departure.