After Minimum Pay Rule Passes, Uber and Lyft Threaten To Leave Minneapolis

The current measure has few substantive differences from a plan that died last year after it was vetoed by Mayor Jacob Frey.

Last year's veto override vote was 5-5 with three abstentions. This time, the vote was a veto-proof 10-3 in favor. There have been changes in the Council lineup since the earlier vote to sustain Frey's first veto.

Lyft rapidly put out an unambiguous response about its plans.

"We are shutting down operations in Minneapolis when the law takes effect on May 1" the statement provided to FreightWaves said. "We will continue to advocate for a statewide solution in Minnesota that balances the needs of riders and drivers and hope to return to Minneapolis as soon as possible." There is legislation at the state level that would provide minimum pay levels, according to media reports in the city.

Several news agencies reported they had received a similar response from Uber, stating that Minneapolis will find itself as the only major city in the U.S. without Uber service on May 1.

Supporters celebrated online. Jamal Osman, a member of the City Council and a sponsor of the legislation, declared on X, formerly Twitter, that "[d]rivers are human beings with families, and they deserve dignified minimum wages like all other workers. Today's vote showed Uber, Lyft, and the Mayor that the Minneapolis City Council will not allow the East African community, or any community, to be exploited for cheap labor."

The office of the city auditor released a study in early February that put the cost of the mandate at approximately $15.57 an hour.

But that figure is not specified in the auditor's report. Rather, the report calculated it on the basis of other numbers in the current ordinance as well as the one last fall when a veto was sustained.

Key provisions require that a driver for what the proposal called a "transportation network company (TNC)" be paid at least $1.40 per mile and 50 cents per minute for the time spent transporting a rider. That rate would be subject to annual revision.

If the calculation comes in at less than $5, the driver would be paid that minimum.

The law also mandates payment of $1.81 per mile if the driver is behind the wheel of a wheelchair-accessible vehicle, as well as the 51-cents-per-minute requirement or the $5 minimum.

A cancellation would require that 80% of the cancellation fee go to the driver. Tips would not be counted against the minimum compensation.

Various groups have been lining up in favor of or against the ordinance for weeks. In an opinion article published earlier this month in the Minneapolis Star Tribune, Dan Meyers spoke against the proposal from the perspective of disabled people. He said in the article that he had worked on a task force that sought to put together a minimum compensation package for TNCs.

"The ordinance the council proposes could nearly double the price of rides, making rideshare rides more expensive than a taxi in Manhattan and a luxury that only the wealthiest can afford," Meyers wrote. "That would be devastating to the disability community, who often rely on rideshare to get to work, to medical appointments, to the grocery store. Rideshare services are critical for people with disabilities to enjoy full participation in the economy and in our communities.

In a report on the Uber and Lyft threats from Fox 9 in Minneapolis, a driver expressed skepticism about the threats.

"We've heard that many, many times. Different cities, different states," driver Said Mohamed, according to the TV station. "They will never leave.  Even if it was $5 per mile, they would never leave. They make enough money in this state and every other state."

The auditor's report did note that Seattle and New York City have minimum pay ordinances for TNC drivers, and have not stopped operating in either of those cities.

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