Uber and Lyft to stop services in Minneapolis after City Council passes minimum pay rate for rideshare drivers

04/15/2024 / By Laura Harris

Rideshare giants Uber and Lyft are threatening to suspend all operations in Minneapolis following the City Council’s decision to enforce a minimum pay rate for rideshare drivers in the city.

The ordinance, set to take effect on May 1, mandates rideshare companies like Uber and Lyft to compensate drivers a minimum rate of $1.40 per mile and $0.51 per minute – or a minimum of $5 per ride. The requirement applies to all transportation services in Minneapolis to ensure that rideshare drivers receive compensation on par with the city’s hourly minimum wage, currently set at $15.57.

City Councilman Robin Wonsley (DSA-Seward), the lead author of the ordinance, said the minimum wage requirement is just “the right thing to do.”

“For far too long, this industry has exploited workers of color and immigrant workers for cheap labor. We have the opportunity and the responsibility to build a rideshare industry that is not based on poverty wages and exploitation,” Wonsley said. (Related: Uber drivers now discriminating against Black Trump supporters, essentially saying, “We don’t serve your kind here.”)

Councilman Jamal Osman (DFL-Cedar-Riverside), a co-author of the ordinance, echoed the statement and stressed the importance of fair compensation, particularly for immigrant drivers from East Africa.

“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,” Osman said.

Josh Gold, an Uber spokesperson, warned that the company would be forced to end its operations in the Minneapolis-Saint Paul metro area, including the Minneapolis-Saint Paul International Airport, once the ordinance takes effect on May 1.

Meanwhile, Lyft spokesperson CJ Macklin said the company would only end its operations in Minneapolis. He added that Lyft will still operate in the airport, but will not be able to pick up or drop off passengers at any Minneapolis locations.

Uber and Lyft argued that they would comply with the ordinance only if the City Council agreed to lower the rate to $0.89 per mile and $0.49 per minute, which they claim would be sufficient to match the city’s minimum wage of $15.57 per hour, according to data taken from the Minnesota Department of Labor and Industry.

City ordinance gained mixed reactions from the public

The ordinance has gained mixed reactions not only from the public reliant on the transportation services but also from Uber and Lyft drivers.

Jake Clark, an Uber and Lyft driver from St. Paul opposes the ordinance. Clark said he has never earned less than $25 per hour and has earned as much as $75 per hour because he prioritizes customer services and strategies which rides to accept.

Meanwhile, Michael Sack, an Uber and Lyft driver with cerebral palsy and a member of the Minneapolis Advisory Committee on People with Disabilities, urged the government to find a solution to increase driver wages without compromising the affordability of ride-hailing services.

“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.

However, Marianne Brown, a suburban Uber driver, and Arianna Feldman, a Minneapolis resident reliant on Lyft due to health issues and limited access to public transport, both support the ordinance.

Brown, a Jamaican immigrant, said it is just right to have a fair minimum wage rate after Uber and Lyft have abused their drivers for too long.

Feldman echoed the statement and sided with the drivers: “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.”

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