Lyft and Uber say they will leave Minneapolis after city council forces them to pay drivers more
MINNEAPOLIS– Lyft and Uber said they will cease operations in Minneapolis after the City Council voted Thursday to override a veto by the mayor and require ride-hailing services to raise driver wages to the equivalent of the local $15 minimum wage. 57 per hour.
Lyft called the ordinance “deeply flawed” and said in a statement that it supports a minimum earning standard for drivers, but not the standard adopted by the city.
“It must be done in a fair manner so that the service remains affordable for riders,” Lyft said. “This ordinance makes our operations unsustainable, and as a result, we will close our Minneapolis operations when the law takes effect on May 1.”
Uber did not immediately respond to a request for comment, but news media reported that it had issued a similar statement saying it would also suspend service that day.
Both companies vowed to push for statewide legislation that would counter Minneapolis’ ordinance, and state House Republicans introduced a bill Thursday that would preempt local regulation of taxi services.
The City Council first approved the measure last week on a 9-4 vote, despite Mayor Jacob Frey’s promise to veto it. The measure requires taxi companies to pay their drivers a minimum of $1.40 per mile and $0.51 per minute for the time they spend transporting a rider – or $5 per trip, whichever is greater – excluding tips . For a multi-city trip, this only applies to the part that takes place within Minneapolis.
Critics of the bill say costs are likely to rise for everyone, including low-income people and people with disabilities who rely on taxi services. Advocates say the services rely on drivers, often people of color and immigrants, for cheap labor.
“Drivers are people with families, and they deserve a decent minimum wage just like all other workers,” Jamal Osman, a council member who co-authored the policy, said in a statement.
“Today’s vote showed Uber, Lyft and the mayor that the Minneapolis City Council will not allow the East African community, or any community for that matter, to be exploited for cheap labor,” Osman added. “The Council chooses employees over corporate greed.”
Democratic Gov. Tim Walz, who last year vetoed a bill that would have raised wages for Uber and Lyft drivers, told The Associated Press on Wednesday that he was concerned because so many rely on those services, including People with Disabilities.
He said he believed the companies would pull the plug, “and there is nothing that can fill that gap.”
Walz added that he hopes the Legislature will seek a compromise that both includes fair pay for drivers and keeps the companies from leaving.
Seattle and New York City have adopted similar policies in recent years that increase wages for taxi drivers, and Uber and Lyft still operate in those cities.