Following the Minneapolis City Council’s decision to enforce a minimum wage increase for ride-hailing drivers, Lyft and Uber announced their imminent withdrawal from the city. The move comes as a response to the council’s vote to mandate driver wages equivalent to the local minimum wage, set at $15.57 per hour.
Lyft criticized the ordinance as “deeply flawed,” emphasizing its support for minimum earning standards for drivers but disapproving of the specific wage requirements outlined by the council. Citing concerns over sustainability and affordability for riders, Lyft announced plans to halt operations in Minneapolis when the law comes into effect on May 1.
Similarly, Uber issued a statement echoing Lyft’s sentiments and confirming its decision to cease service on the same day, although the company did not immediately respond to media requests for comment.
Both ride-hailing giants pledged to advocate for statewide legislation that would supersede the Minneapolis ordinance. Concurrently, state House Republicans proposed a bill aimed at preempting local regulations on ride-hailing services, signaling a broader legislative battle over gig economy policies.
The Minneapolis ordinance, initially passed by the City Council despite Mayor Jacob Frey’s veto, mandates ride-hailing companies to compensate drivers based on mileage and time spent transporting riders. Critics argue that the policy could lead to increased costs for riders, particularly impacting low-income individuals and those with disabilities who rely on ride-hailing services.
However, proponents of the measure highlight the importance of dignified wages for drivers, emphasizing the diverse workforce within the industry, often comprising people of color and immigrants. Councilmember Jamal Osman underscored the Council’s commitment to prioritizing workers’ rights over corporate interests, asserting that the policy aims to combat labor exploitation.
Meanwhile, Governor Tim Walz expressed concerns about the potential ramifications of Lyft and Uber’s departure, particularly for disabled individuals and others reliant on ride-hailing services. He urged legislative efforts to find a compromise that ensures fair pay for drivers while averting service disruptions.
The Minneapolis ordinance aligns with similar wage policies enacted in cities like Seattle and New York City, where Uber and Lyft continue to operate despite regulatory changes. As the debate over gig economy regulations intensifies, the fate of ride-hailing services in Minneapolis underscores broader tensions between labor rights and corporate interests.