Here’s what we know about Uber and Lyft’s planned exit from Minneapolis in May
MINNEAPOLIS– The future of Uber and Lyft in Minneapolis has sparked concern and debate in recent weeks after the City Council voted last month to require taxi companies to pay drivers a higher rate as long as they are within city limits.
Uber and Lyft responded by saying they would stop serving the Minneapolis area when the ordinance takes effect May 1, prompting the city to weigh the ordinance it passed. The state could also take action, while riders and drivers wonder what might happen next.
Here’s what we know so far:
The Minneapolis City Council last month overrode a veto from the mayor and passed an ordinance requiring ride-hailing companies to pay drivers a minimum rate of $1.40 per mile and $0.51 per minute – or $5 per trip , whichever is greater – excluding tips, for that time spent transporting passengers in Minneapolis.
Supporters of the ordinance said the rate would ensure companies pay drivers the equivalent of the city’s minimum wage of $15.57 per hour.
Councilman Jamal Osman, co-author of the ordinance, said in a statement: “Drivers are people with families, and they deserve a decent minimum wage, just like all other workers. …the Minneapolis City Council will not allow the East African community, or any community for that matter, to be exploited for cheap labor.”
Many East African immigrants in the Minneapolis area work as Uber and Lyft drivers and have called for a fare increase.
However, a recent study commissioned by the Minnesota Department of Labor and Industry found that a lower rate of $0.89 per mile and $0.49 per minute would meet the goal of $15.57 per hour.
Uber and Lyft said they can support the rate found in the state’s investigation. But if the higher rate from the Minneapolis ordinance takes effect, the companies said they will exit the market on May 1.
Josh Gold, a spokesman for Uber, said the company plans to end operations in Minneapolis, St. Paul and the Twin Cities metro area — including the Minneapolis-Saint Paul International Airport.
The metropolitan area has a population of over 3 million, which is more than half of the state’s population.
CJ Macklin, a Lyft spokesman, said Lyft will end operations only in Minneapolis. Lyft will still serve the airport, but will not pick up or drop off passengers at Minneapolis locations.
Both companies previously pulled out of Austin, Texas, in 2016 after the city pushed for fingerprint-based background checks on drivers as a driver safety measure. The companies returned after the Texas Legislature overrode the local measure and passed a law implementing different rules statewide.
Minnesota’s Democratic Governor Tim Walz said he is “deeply concerned” about the possibility of Uber and Lyft leaving the Minneapolis area.
Walz said the measure would have a statewide impact and impact everyone who relies on the service, including people trying to get home safely from bars, people with disabilities, students and others.
State lawmakers could pass legislation that would replace the local ordinance. But Walz said the most efficient solution is to ask the Minneapolis City Council to work out a compromise.
Members of the Minneapolis City Council could vote to change the ordinance, take it back completely or leave it as is.
Councilwoman Linea Palmisano said she plans to continue voting against it unless it is changed. Palmisano said she has heard from many community members who are against it, including students, part-time and low-income workers, hospitals and more.
Palmisano said she has also heard from drivers who disagree and are “now at risk of losing their livelihood.”
Council Member Robin Wonsley, lead author of the ordinance, said the ordinance’s rate is “the right thing to do.”
“For too long, this industry has exploited workers of color and immigrant workers for cheap labor. We have the opportunity and responsibility to build a rideshare industry that is not based on poverty wages and exploitation,” she said.
Residents of the Twin Cities metro area are divided, with some supporting the ordinance because it will help marginalized workers, while others oppose it because they don’t want Uber and Lyft to go.
Marianna Brown, an Uber driver in her 60s who lives in a Minneapolis suburb, supports the ordinance and isn’t concerned. She says other taxi companies — and even a local driver-owned cooperative — are planning to enter the Minneapolis market. . Brown, a Jamaican immigrant, said drivers have been abused by Uber and Lyft for too long.
Arianna Feldman, 31, of Minneapolis, said she supports the ordinance and has taken nearly 2,000 rides with Lyft because she doesn’t drive, has health problems and doesn’t have access to reliable public transportation.
“I think it’s really shameful that these multi-million dollar corporations are holding us hostage in this way and punishing communities because they are demanding a very basic right to be properly compensated,” she said.
Jake Clark, 44, of St. Paul, is an Uber and Lyft driver and opposes the ordinance. Clark said he has never made less than $25 an hour and as much as $75 an hour because he prioritizes customer service and strategizes which rides to accept.
Michael Sack, 34, of Minneapolis, also opposes the ordinance. He has cerebral palsy and is a member of the Minneapolis Advisory Committee on People with Disabilities. He urged the City Council and state Legislature to find a way to increase driver wages while keeping ride-hailing services affordable.
“It’s critical to keep the cost of rides low because low-income people, which most people with disabilities do, use Uber and Lyft,” he said.
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Trisha Ahmed is a staff member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow her on X, formerly Twitter: @TrishaAhmed15