Lyft and Uber to Cease Operations in Minneapolis Over Driver Wage Requirements

Following the city council's decision to mandate a pay raise for ride-hailing drivers, both Lyft and Uber have announced that they will terminate their operations in Minneapolis. This decision comes in response to a Thursday vote, which saw the council override a mayoral veto and enforce a requirement for ride-hailing services to increase driver wages to match the local minimum wage of $15.57 per hour.

Lyft's Response

Lyft has expressed its discontent with the ordinance, labeling it as "deeply flawed." The company stated that while it supports a minimum earning standard for drivers, it does not endorse the one approved by the council. According to Lyft, the ordinance would make their operations financially unfeasible, leading them to shut down services in Minneapolis effective May 1.

Uber's Statement

Uber, on the other hand, did not immediately comment on the matter. However, reports from news outlets indicated that the company issued a similar statement, announcing its intention to halt services on the same day as Lyft.

Statewide Legislation and Response from House Republicans

Both Lyft and Uber have committed to advocating for statewide legislation that would counter the Minneapolis ordinance. In line with this, state House Republicans proposed a bill on Thursday aimed at preempting local regulations of ride-hailing services.

Details of the Measure

The measure, which was initially passed by the City Council in a 9-4 vote, mandates ride-hailing companies to compensate drivers with a minimum of $1.40 per mile and $0.51 per minute for the time dedicated to transporting a rider. This requirement also includes a provision for a minimum payment of $5 per ride, excluding tips. Notably, these stipulations only apply to trips conducted within the boundaries of Minneapolis.

Support and Criticism

Critics of the measure have raised concerns about the anticipated increase in costs, potentially affecting individuals with lower incomes and those with disabilities who heavily rely on ride-hailing services. On the other hand, proponents argue that these services have historically depended on underpaid labor from individuals, notably people of color and immigrants.

Reaction from Governor Tim Walz

Democratic Governor Tim Walz, who had vetoed a similar bill the previous year, expressed apprehension over the impact of the decision. Governor Walz highlighted the dependence of many, including disabled individuals, on these services and voiced concern over the potential void that would be created by the withdrawal of Uber and Lyft.

Comparison with Other Cities

This move by Minneapolis aligns with similar policies adopted in cities like Seattle and New York City in recent years, where measures have been implemented to increase wages for ride-hailing drivers. Notably, Uber and Lyft continue to operate in these cities despite the adjusted regulations.