Minneapolis To Reconsider Wage Hike for Uber and Lyft Drivers After Companies Threaten To Leave

Thursday, Minneapolis’s city council is set to meet to decide whether or not it should follow through with a measure passed last month to raise the wages of rideshare drivers.

AP/Richard Vogel
The future of Uber and Lyft in Minneapolis has been a source of concern and debate in recent weeks after the City Council voted last month to require that ride-hailing companies pay drivers a higher rate while they are within city limits. AP/Richard Vogel

The Minneapolis city council is set to consider Thursday how to react to plans by Uber and Lyft to stop operating in the metro area after companies announced they would leave due to a citywide regulation aimed at ensuring drivers are paid at least the city’s minimum wage.

In March, the city council at Minneapolis overrode a veto by the mayor of Minneapolis, Jacob Frey, of a law that would require ride-hailing companies to pay drivers either $1.40 a mile and $0.51, or $5 a ride, depending on which amount was greater.

The new rates excluded tips and were aimed at bringing the wages paid to drivers in line with the city’s minimum wage of $15.57 an hour.

“Drivers are human beings with families, and they deserve dignified minimum wages like all other workers,” Councilman Jamal Osman said in a statement, adding that “the Minneapolis City Council will not allow the East African community, or any community, to be exploited for cheap labor.”

Many East African immigrants at Minneapolis drive for Uber and Lyft, and the constituency was a key group in advocacy for higher wages for drivers in the city. 

Since the new law was passed, Uber and Lyft have announced that they would stop services at the city by May 1 if the city does not lower the rate.

In a statement to the Sun, Lyft spokesman CJ Macklin said the company supports the state’s proposed wage hike, which they say would “increase current driver earnings by 17 percent while allowing us to continue to operate within the city.”

“Despite the fact that the Council has repeatedly rejected offers to collaborate on this important issue, we are encouraged that they are now open to reconsidering their extremely damaging ordinance,” Mr. Macklin says.

In a statement to the Associated Press, Mr.Macklin said the company plans to end operations by not picking up or dropping off passengers at Minneapolis. However, the app will still service the airport, which mostly lies outside the city limits. 

An Uber spokesman, Josh Gold, has told the Associated Press that Uber will not service the city or the airport.

The companies have thrown their support behind a rate that the Minnesota Department of Labor found would bring the driver’s wages in line with the city’s minimum wage — $0.89 a mile and $0.49 a minute.

This is not the first time that Uber and Lyft have recoiled from city-based regulations. In 2016, the companies left Austin after a push to require background checks for drivers. The companies returned after the Texas legislature overrode the city law.

Since the announcement from the companies, city and community leaders have stepped in to pressure the council to reconsider the legislation. 

“I couldn’t care less about Uber and Lyft’s bottom line,” Mr. Frey said at a press conference Monday. “This is not about helping those two companies. This is about helping the people that rely on this important transportation network to get from point A to point B.”

Other city council members have changed their position since the ride-hailing companies made it clear they would leave the city, including Councilwoman Andrea Jenkins, who voted for the law, and Councilwoman Robin Wonsley, who co-authored the bill.

The state president for the National Federation of the Blind, Corbb O’Connor, also spoke at the press conference in support of reconsidering the rate change.

“We support other rideshare companies coming in, but one thing that we know takes time and effort and energy and skill and expertise and connection with the community is making sure those apps work for people with disabilities,” Mr. O’Connor said.

While there are currently four other rideshare companies in the process of applying to operate at Minneapolis — Moov, MyWheels, Joyride, and Wridz — only Uber and Lyft are currently licensed to operate in the city.

The override of the mayor’s veto passed the city council at Minneapolis ten to three in March. With Ms. Jenkins and Ms. Wonsley now supporting reconsidering the measure, there are at least five in support of rolling back the new wage before Uber and Lyft leave on May 1.

The New York Sun

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