Uber
and
Lyft
have announced that they will discontinue their services in Minneapolis from May 1 as the city council has voted to enforce a minimum wage of $15.57 per hour for rideshare drivers. The council's 10-3 vote has created controversy, with the rideshare giants claiming that it will lead to job losses for thousands of people and leave many stranded.
The new law will come into effect on May 1, and it requires rideshare companies to pay drivers a minimum of $1.40 per mile and 51 cents per minute while transporting a rider or $5 per ride, whichever is greater, excluding tips.
The decision was taken after a state-commissioned study by the Minnesota Department of Labor and Industry, which found that drivers could earn the equivalent of minimum wage with lower rates, even when accounting for benefits such as health insurance and paid time off.
Lyft spokesperson CJ Macklin called the ordinance "deeply flawed," stating that the company supports a minimum earning standard for drivers but believes it should be implemented in an "honest way" that keeps the service affordable for riders. Lyft plans to advocate for a statewide solution in Minnesota that balances the needs of both drivers and riders.
Similarly, Uber expressed disappointment in the council's decision, claiming it ignores data and will put 10,000 people out of work. Josh Gold, Uber's senior director of public affairs, said the company remains committed to achieving comprehensive statewide legislation that guarantees drivers a fair minimum wage while keeping rideshare affordable.
The bill argues that drivers deserve dignified minimum wages like all other workers and that affordable rides should not come at the expense of drivers' welfare. The move came after rideshare and delivery drivers staged a protest on Valentine's Day this year, demanding fair pay and working conditions.
Critics warn that costs will spike for everyone, including low-income populations and people with disabilities. There are also concerns about the impact on transportation in the city, as Minneapolis only has 39 licensed cab drivers, a significant decrease from the 2,000 cab drivers in 2014.
More cities and states, not just Minneapolis, have increased wages for rideshare and delivery drivers. This is becoming a trend due to ongoing disputes. In November, Uber and Lyft agreed to pay $290 million and $38 million, respectively, to resolve a multi-year investigation by the New York Attorney General's office, which called it the largest wage theft settlement in the office's history.
English (US) ·