Uber, Lyft Leave Minneapolis After New Minimum Wage Law Leaves 10,000 Out Of Work: 'We Are Disappointed The Council Chose To Ignore The Data'

Uber Technologies Inc. and Lyft Inc. announced they will cease operations in Minneapolis starting May 1, after the City Council overrode Mayor Jacob Frey’s veto and mandate that rideshare drivers be paid the local minimum wage of $15.57 per hour. 

After the veto, Uber said, “We are disappointed the Council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded." 

The decision has sparked significant controversy for rideshare users in the area and Uber and Lyft, which both criticized the decision. Lyft termed the bill as “deeply flawed” and expressed hope for a return if a more favorable statewide solution is found in Minnesota.

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Late last week, Lyft told many of its customers, "We're leaving Minneapolis. Despite our efforts and your support, the Minneapolis City Council passed an ordinance that would make rides on the Lyft platform unaffordable for the majority of Minneapolis residents. This drastic drop in rides means the thousands of drivers who rely on the platform for earnings will ultimately earn less, creating an unsustainable situation for our customers. As a result, starting May 1, Lyft will be forced to stop offering rides in Minneapolis." 

This development comes after protests by rideshare and delivery drivers demanding fair pay and working conditions that were staged on Valentine’s Day. The tension is part of a larger national conversation about gig worker rights and fair compensation. The rideshare companies' decision to leave Minneapolis follows a significant legal settlement in November, where Uber agreed to pay $290 million and Lyft $38 million to resolve a multiyear investigation by the New York Attorney General’s office into wage theft, the largest settlement of its kind in the office’s history.

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The Minneapolis City Council, which voted 10-3 to implement the wage law, argues that the ordinance supports the city's large East African immigrant community, many of whom work as drivers for these services. They feel this decision counters exploitation and ensures fair wages. However, Frey and Minnesota Gov. Tim Walz have expressed concerns, emphasizing the need for a solution that benefits both drivers and rideshare companies while keeping the service affordable for riders.

Many have raised concerns about the broader implications of this. Several studies have shown Uber and Lyft to reduce drunk driving incidents. People needing to drive their vehicles into the city could mean less parking, which could decrease foot traffic and hurt local businesses. 

The companies’ departure from Minneapolis is part of a broader debate on how to regulate gig economy jobs and ensure fair compensation without sacrificing service availability or affordability. The situation underscores the ongoing challenges cities face in balancing the interests of gig workers, companies and consumers in the rapidly evolving landscape of urban mobility and employment.

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