05/29/2024

Ride-hailing giants Uber and Lyft are making a bold statement to the Minneapolis City Council: approve a proposed ordinance, and they’ll pack up their services and leave the city by 2024. This dramatic ultimatum comes as the City Council prepares to vote on the ordinance, which aims to establish higher wages for rideshare drivers.

The proposed ordinance, which passed through the city’s Business, Inspections, Housing and Zoning Committee with unanimous support, seeks to ensure rideshare drivers a minimum compensation of $0.51 per minute and $1.40 per mile while transporting passengers. These earnings would increase annually in alignment with the city’s minimum wage adjustments. Additionally, the ordinance includes provisions granting drivers more rights when addressing complaints that might lead to account “deactivations” or suspensions by the apps. Furthermore, it aims to enhance safety features by preventing riders from using gift cards for pickup requests. This step is intended to mitigate difficulties in tracing riders engaged in criminal activities, as noted by drivers.

Both Uber and Lyft, however, are vehemently opposing this proposed ordinance, claiming it would result in exorbitant rider fares and diminish driver earnings by reducing ride demand. Lyft explicitly warned in a letter to the City Council that if the ordinance is enacted, it would be compelled to cease its operations in Minneapolis starting January 1, 2024. Uber went a step further, sending out emails to its app users, detailing the potential consequences of the ordinance and urging them to contact the mayor and council to express opposition.

This isn’t the first time these rideshare companies have been at odds with the state’s regulatory attempts. In May, Governor Tim Walz vetoed a bill that aimed to increase wages for rideshare drivers across the state. Prior to the veto, both Uber and Lyft had sent letters opposing the bill, with Uber even threatening to limit its services exclusively to the Twin Cities metro area.

Now, as the Minneapolis City Council’s vote approaches, the stakes are higher than ever. The proposed ordinance requires support from at least nine out of the 13 council members to avoid potential veto by Mayor Jacob Frey. While a handful of council members have already expressed their support for the ordinance, opposition from industry giants like Uber and Lyft is casting a cloud of uncertainty over the future of rideshare services in Minneapolis. As the city grapples with striking a balance between fair compensation for drivers and reasonable fares for riders, the outcome of this vote will reverberate across the broader conversation about the gig economy’s impact on labor rights and corporate responsibility.