Uber and Lyft are considering leaving Minneapolis following a City Council vote to enforce a minimum wage for drivers. The council voted 10 to 3 to override a mayoral veto of an ordinance mandating ride-hailing services to pay drivers $1.40 per mile and 51 cents per minute to ensure they earn at least $15.57 per hour.
The wage ordinance was initially approved last week but vetoed by Mayor Jacob Frey. Both Uber and Lyft announced plans to cease operations in the city when the law goes into effect on May 1. Uber also stated it would withdraw from the entire Minneapolis metro area, including the airport.
The companies argue that they would have to raise prices for riders, ultimately resulting in drivers earning less. Lyft criticized the bill as “deeply flawed,” warning it would make rides unaffordable for most residents.
This move is part of a trend of minimum wage laws targeting gig economy workers as tensions between workers and companies escalate over fair pay. New York City, for example, mandated tech platforms like Uber to pay food delivery workers $18 an hour.
Opponents of the Minneapolis bill, including the mayor and Minnesota Governor Tim Walz, who vetoed a similar bill previously, argue against its implementation.
Supporters, such as City Council member Jamal Osman, who helped write the law, noted the significant reliance of ride-hailing services in Minneapolis on drivers from low-income or immigrant communities.
It is expected that the companies will lobby for a state bill to overturn the Minneapolis ordinance. State legislators in Minnesota proposed minimum pay standards for ride-hailing drivers slightly lower than the city’s approved rate.
