Lyft and Uber have threatened to cease operations in Minneapolis following the adoption of a new rule by the city council. The rule, passed in a 7-5 vote, sets a minimum wage for rideshare drivers in Minneapolis. The ordinance, if implemented, would require drivers to be paid at least $1.40 per mile and $0.51 per minute within the city.
The decision comes as gig workers across the country are advocating for fair wages and job benefits. States and cities have been attempting to pass legislation regarding the gig economy, but have faced opposition.
Lyft has sent a letter to the council warning that if the proposal becomes law, the company will be forced to cease operations in Minneapolis on January 1, 2024. The company believes that the ordinance would negatively impact drivers, ultimately leading to lower earnings. Lyft argues that prices could double, making rides unaffordable for many.
Uber has also expressed concerns about the legislation. The company emailed its riders, urging them to contact the Mayor and City Council to oppose the move. Uber claims that the ordinance could significantly limit its ability to remove unsafe drivers from the platform and increase the cost of rides. Uber stated that if the bill passes, they may have to reduce service or shut down operations entirely.
Minneapolis Mayor Jacob Frey has the opportunity to veto the ordinance until August 23. In an email to the City Council, Frey expressed his concerns about the impact of the ordinance on worker protections, public safety, disability rights, and transportation goals. He believes that more time is needed for deliberation.
After the ordinance passed, the Office of Mayor Frey told CNN that the mayor supports drivers being paid more. Frey had previously stated in a letter to the City Council that he supported increasing driver pay.
The debate over the regulation of the gig economy is not unique to Minneapolis. In 2020, California passed Prop. 22, which allows gig economy companies to treat drivers as independent contractors rather than employees. However, the measure includes a minimum earnings guarantee.
In June, New York City announced a new minimum pay-rate for app food delivery workers, and Uber and other food delivery apps sued the city in July, claiming that the law would be detrimental to delivery workers.
As the battle over gig worker rights continues, the future of rideshare services in Minneapolis remains uncertain. The city council’s decision has sparked a fierce debate, with both sides emphasizing the potential consequences of the new rule.