Uber and Lyft Delay Departure from Minneapolis Amid Driver Pay Raise Delay

Minneapolis city officials have successfully pushed back the start of a driver pay raise, prompting Uber and Lyft to delay their planned exit from the city. The Minneapolis City Council's decision to implement the ordinance on July 1 instead of May 1 has resulted in this significant development.

The unanimous vote by the Minneapolis City Council to delay the implementation was fueled by various reasons. Council members expressed concern that the original timeline would allow other ride-hailing companies more time to establish themselves in the market before Uber and Lyft potentially leave. Additionally, this delay provides Minnesota lawmakers with an opportunity to pass statewide rules on pay for ride-hailing drivers.

Under the ordinance, ride-hailing companies are required to pay drivers a minimum of $1.40 per mile and $0.51 per minute, or $5 per ride, whichever amount is greater (excluding tips). The aim is to ensure that drivers receive the equivalent of the city’s minimum wage of $15.57 per hour after accounting for gas and other expenses.

However, a recent study commissioned by the Minnesota Department of Labor and Industry found that a lower rate of $0.89 per mile and $0.49 per minute would meet the $15.57 goal.

Response from Uber and Lyft

Uber and Lyft representatives have expressed their willingness to support the lower rate from the state’s study but oppose the higher rate set by the city. Uber has cautioned that it would end operations in the entire Minneapolis-St. Paul metropolitan area, while Lyft would only cease serving Minneapolis if the higher rate is enforced.

Both companies have raised concerns about the increased cost for riders, potentially leading to a decrease in demand and ultimately affecting the earnings of drivers.

State legislators have proposed preemption of the city ordinance with a state law, attempting to find a legislative solution to the ongoing dispute. The hope is that negotiations between state and city officials can resolve the issue and ensure the continued operation of the ride-hailing companies while protecting the drivers.

Driver Perspectives

Uber and Lyft drivers in the Minneapolis area hold differing views on the driver pay issue. While some drivers support the ordinance, others oppose it. Drivers who support the rate increase argue that they are currently struggling to make ends meet, despite working long hours. On the other hand, some part-time drivers oppose the ordinance, citing their ability to earn above-average income and expressing concerns about potential replacements for Uber and Lyft.