Ride-hailing companies Uber and Lyft said they will delay their planned exit from Minneapolis after city officials decided Wednesday to push back the start of driver pay raises by two months.
The Minneapolis City Council voted unanimously to implement the ordinance on July 1 instead of May 1.
Some board members said this gives other ride-hailing companies more time to establish themselves in the market before Uber and Lyft leave, and gives Minnesota lawmakers the ability to pass state-level rules on driver pay. ride-hailing.
Councilmember Robin Wonsley, the lead author of the ordinance, said the delay would lead to better outcomes for drivers and passengers and lay a stronger foundation for a more equitable ride-hailing industry across the state. He defined the current industrial model as “extremely exploitative”.
Under the ordinance, ride-hailing companies must pay drivers at least $1.40 per mile and $0.51 per minute – or $5 per ride, whichever is greater – not including tips, for time spent ferrying passengers to Minneapolis.
The change aims to ensure that companies pay drivers the equivalent of the city’s minimum wage of $15.57 an 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 target.
Representatives for Uber and Lyft say they can support the lowest fare from the state study, but not the city’s highest fare. Uber says it will end operations in the entire Minneapolis-St. area. Paul – a seven-county region of 3.2 million people – while Lyft would stop serving only Minneapolis.
Lyft said the city’s fee “will make rides too expensive for most riders, meaning drivers will ultimately make less money. This is unsustainable for our customers.”
Uber also warned of declining demand, saying that even the state study’s rate would still “likely lead to lower hourly pay as drivers will spend more time between rides waiting for passengers,” the spokesperson said of the Josh Gold company.
Some state lawmakers have proposed preempting, or overriding, the city ordinance with a state law.
Uber and Lyft previously pulled out of Austin, Texas, in 2016, after the city pushed for fingerprint-based driver background checks as a driver safety measure. The companies returned after the Texas Legislature struck down the local measure and passed a law implementing different rules statewide.
At the Minnesota Legislature, Democratic House Majority Leader Jamie Long of Minneapolis said he hoped ongoing negotiations between state and city officials could help resolve the dispute.
“I think we’ll get to an outcome that will keep companies operating and protect drivers,” Long told reporters. “I really hope we can avoid preemption.”
Uber and Lyft drivers in the Minneapolis area are divided on the issue of driver pay.
Muhiyidin Yusuf, 49, supports the ordinance. Yusuf said he works as an Uber and Lyft driver for about 60 hours each week but still relies on government assistance and accused companies of making large profits while he struggles.
“I’m doing all the work. But they are taking most of the money,” said Yusuf, who immigrated from Somalia in 2010. He is one of many African immigrants in the Minneapolis area who work as Uber and Lyft drivers and have supported rising fares in recent years.
Maureen Marrin, a part-time Uber and Lyft driver, opposes the ordinance. Marrin said she earns an average of $40 an hour while driving and she doesn’t understand how other drivers earn less than the equivalent of minimum wage.
“I’m lucky. I’m retired, I have another source of income, so it’s also easier for me to earn more because I can choose,” Marrin said. “But I’m worried that (Uber and Lyft) are going to go away and be replaced by something that we don’t even know what we’re going to get.”