Lyft and Uber are reconsidering their decision to leave Minneapolis on May 1 due to a new minimum wage for rideshare drivers set to go into effect. The Minneapolis City Council voted to override the mayor’s veto and institute a minimum wage of $15.57 an hour for rideshare drivers, causing both companies to announce their departure from the city. However, council members are now proposing an extension to push the effective date to July 1 to allow time for a compromise to be reached and for new ride-hailing services to start.
Lyft had previously criticized the bill as “deeply flawed” and stated that the ordinance would make their operations unsustainable, while Uber expressed disappointment in the council’s decision. Mayor Jacob Frey supported a minimum wage for rideshare drivers but opposed the ordinance due to the lack of consideration for a state study on driver pay. The ordinance mandates a minimum pay rate per mile and per minute for rideshare drivers within Minneapolis, with Frey citing lower numbers from the state analysis.
Some council members are now proposing an amendment to the ordinance to lower the per-mile rate to $1.21 while maintaining the proposed per-minute rate of $0.51. They emphasized the importance of gathering information, consulting stakeholders, and making informed choices to achieve fair wages for drivers, stability for drivers and riders, and a healthy competitive market. The proposal is set to be voted on at a council meeting, with expectations that there will be enough votes to enact the delay.
Uber expressed support for the proposed delay, citing the need for more time to work with Minnesota leaders on a comprehensive statewide solution for increasing pay, protecting flexibility, and keeping rides affordable. Lyft has not yet responded to requests for comment on the situation. The outcome of the vote on the proposed amendment and extension will determine whether Lyft and Uber decide to continue operating in Minneapolis or proceed with their plans to leave the city on May 1. It remains to be seen how the situation will unfold and what impact it will have on rideshare drivers and passengers in Minneapolis.
