Uber and Lyft have discontinued their service in Minneapolis and the Twin Cities following the City Council's decision to override Mayor Jacob Frey's veto of boosting rideshare drivers' pay.
The council voted 10-3 to override the mayor's veto. Council members initially voted 9-4 to approve the new ordinance, but Councilor Emily Koski switched her vote to support the override on Thursday, which takes effect on May 1.
Lyft promptly announced it would cease services in Minneapolis on that date, while Uber is withdrawing services across the metro area. Koski changed her stance to review a recent state task force report on rideshare pay, released the day after the council initially passed the ordinance.
The Minnesota Labor and Industry Department's Analysis of TNC Drivers' Earnings
The Ward 11 council member's recent report proved that transportation network company (TNC) drivers earn below minimum wage and emphasized the importance of upholding worker rights and protections.
The Minnesota Department of Labor and Industry's 2022 report studied data from over 18 million rides from 1,800 surveyed TNC drivers, which revealed an average of $14.48 per hour in the Twin Cities, falling below Minneapolis' $15.57 minimum wage.
The study suggests paying drivers up to $1.21 per mile and 49 cents per minute for Twin Cities rides would meet the minimum wage requirements and could also include health insurance, paid leave, and retirement benefits. However, the Minneapolis ordinance mandates $1.40 per mile and 51 cents per minute, higher pay than suggested. Frey had initially pushed for $1.20 per mile and 35 cents per minute.
The Pay Increase Veto Override
Council members Robin Wonsley, Jason Chavez, and Jamal Osman co-wrote the policy, ensuring drivers get 80% of canceled rides and earn at least $5 per ride, which also includes yearly pay raises and limits on wage deductions.
Wonsley described it as a David and Goliath situation, where ordinary workers challenged corporate giants and won. He emphasized that "Uber and Lyft want us to believe they are untouchable" and that the status quo cannot be fixed. Still, the vote showed the power of political determination instead.
Lyft, Uber Fighting Against A Deeply Flawed Ordinance
Both rideshare giants argue that the new ordinance would lead to fewer drivers and make their business models unworkable.
Lyft stated the new ordinance is deeply flawed and will cease its operations in the city on May 1. Uber expressed disappointment over the city council's decision and stated it will also end its services in the Twin Cities metro area when the law takes effect, making it the first metro area in the U.S. without Uber.
The city council noted that several small startup rideshare businesses are collaborating with the city on licensing and preparing to launch under the new regulations, which leaves the council and Frey ample time to adjust the ordinance before May 1.
