Lyft and Uber announced plans to expand their operations in Minneapolis after the Minneapolis City Council passed a resolution Thursday that overrode the mayor’s veto and requires ride-hailing services to raise driver wages to the equivalent of the local minimum wage of $15.57 an hour. announced that it would be discontinued.
Lyft called the ordinance “seriously flawed” and said in a statement that the ordinance supports minimum income standards for drivers, but not the standards passed by Congress. .
“It has to be done in an honest way to make the service affordable for passengers,” Lift said. “This ordinance makes our operations unsustainable and, as a result, we will cease operations in Minneapolis when the law takes effect on May 1.”
Uber did not immediately respond to a request for comment, but media outlets reported that the company issued a similar statement saying it would suspend its services on the same day.
The companies have pledged to push for a statewide bill to counter the Minneapolis ordinance, and state House Republicans on Thursday proposed a bill that would preempt local regulations on ride-hailing services.
The City Council passed the measure for the first time last week in a 9-4 vote, despite Mayor Jacob Frey’s promise to veto it. The measure would require ride-hailing companies to pay at least $1.40 per mile, $0.51 per minute, or $5 per ride, whichever is greater, for the time they spend transporting passengers, excluding tips. You are required to pay the driver the same amount. If you’re traveling to multiple cities, this only applies to the portion that takes place within Minneapolis.
Critics of the bill say it would likely increase costs for everyone who relies on ride-hailing services, including low-income people and people with disabilities. Supporters say the service relies on drivers, who are often people of color and immigrants, as cheap labor.
Democratic Gov. Tim Walz, who last year vetoed a bill that would increase wages for Uber and Lyft drivers, told The Associated Press on Wednesday that because so many people, including people with disabilities, rely on these services, He said he was concerned.
He said he believed both companies would exit, and that “there is nothing to bridge that gap.”
Walz added that he hopes Congress will seek a compromise that includes fair wages for drivers and discourages companies from leaving.
Seattle and New York City have passed similar policies in recent years to raise pay for ride-hailing drivers, and Uber and Lyft still operate in those cities.
