Announced exit of Uber, Lyft concerns officials, residents
MINNEAPOLIS — The future of Uber and Lyft in Minneapolis has garnered concern and debate in recent weeks after the City Council voted last month to require that ride-hailing companies pay drivers a higher rate while 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, causing the city to weigh the ordinance it passed. The state could also take action, while riders and drivers are left wondering what could come next.
Here is what we know so far.
What happened?
The Minneapolis City Council overrode a mayoral veto last month and passed an ordinance that requires ride-hailing companies to pay drivers a minimum rate of $1.40 a mile and $0.51 a minute — or $5 per ride, whichever is greater — excluding tips, for the time spent transporting passengers in Minneapolis.
Supporters of the ordinance said the rate would ensure that companies pay drivers the equivalent of the city’s minimum wage of $15.57 an hour.
Council member Jamal Osman, who co-wrote the ordinance, said in a statement: “Drivers are human beings with families, and they deserve dignified minimum wages like all other workers . ... The Minneapolis City Council will not allow the East African community, or any community, to be exploited for cheap labor.”
Many East African immigrants in the Minneapolis area work as Uber and Lyft drivers and have advocated for the rate increase.
However, a recent study commissioned by the Minnesota Department of Labor and Industry found that a lower rate of $0.89 a mile and $0.49 a minute would meet the $15.57-an-hour goal.
Uber and Lyft’s response
Uber and Lyft said they can support the rate from the state’s study. But if the higher rate from the Minneapolis ordinance goes into effect, the companies said they will leave the market May 1.
Josh Gold, an Uber spokesperson, said the company plans on ending its operations in Minneapolis, St. Paul and the Twin Cities metro area — including Minneapolis-Saint Paul International Airport.
The metro area includes more than 3 million people, which is more than half the state’s population.
CJ Macklin, a Lyft spokesperson, said Lyft will end its operations only in Minneapolis. Lyft will still service the airport but will not pick up or drop off passengers at any Minneapolis locations.
The state’s options
Democratic Gov. Tim Walz said he is “deeply concerned” about the possibility of Uber and Lyft leaving the Minneapolis area.
Minnesota lawmakers could pass legislation that would supersede the local ordinance. But Walz said the most efficient solution is to ask the Minneapolis City Council to work out a compromise.
The city’s options
Minneapolis City Council members could vote to change the ordinance, take it back completely or leave it as is.
What people are saying
Arianna Feldman, 31, of Minneapolis said she supports the ordinance and has taken close to 2,000 rides on Lyft because she doesn’t drive, has health issues and doesn’t have access to reliable public transit.
“I think it’s really shameful that these multimillion-dollar companies are holding us hostage like this and punishing communities for demanding a very basic right to get compensated correctly,” she said.
Michael Sack, 34, of Minneapolis opposes the ordinance. He has cerebral palsy and serves on the Minneapolis Advisory Committee on People with Disabilities.
He urged the City Council and state Legislature to find a way to increase drivers’ pay while keeping ridehailing services affordable.
“It is critical to keep the cost of rides down because people with low incomes, which most individuals with impairments have, utilize Uber and Lyft,” he said.