Uber and Lyft are threatening to pull out of Minneapolis after a City Council vote guaranteed a minimum hourly wage to drivers, sparking a heated debate over fair pay in the gig economy.
The council voted 10 to 3 to override a mayoral veto of an ordinance that mandates ride-hailing services to pay drivers a minimum rate of $1.40 per mile and 51 cents per minute, ensuring they earn the local minimum wage of $15.57 per hour. This move has put Uber and Lyft on edge, with both companies announcing plans to cease operations in the city when the law goes into effect on May 1.
Uber even went a step further, stating that it would also withdraw from the entire Minneapolis metro area, including the airport, making it the first metro area in the country without Uber’s presence. The companies argue that the increased costs would have to be passed on to riders, ultimately resulting in drivers earning less.
This wage ordinance is part of a growing trend of minimum wage laws for gig economy workers. New York City, Washington, California, and Seattle have all implemented similar standards in recent years. However, critics of the Minneapolis bill, including Mayor Jacob Frey and Minnesota Governor Tim Walz, believe it could have negative consequences.
Supporters of the ordinance, like City Council member Jamal Osman, argue that ride-hailing services in Minneapolis heavily rely on drivers from low-income or immigrant communities. The companies are expected to lobby for a state bill that could potentially overturn the Minneapolis ordinance, as state legislators have already proposed minimum pay standards for ride-hailing drivers at a slightly lower rate.
As tensions rise between workers and gig companies over fair pay, the future of Uber and Lyft in Minneapolis remains uncertain. Stay tuned for updates on this developing story.
