Lyft and Uber Threaten to Stop Service in Minneapolis Over New Minimum Wage Rule
New York
CNN
City Council Adopts Rule Setting Minimum Wage for Rideshare Drivers
Lyft and Uber threatened to stop doing business in Minneapolis after the city council adopted a new rule Thursday that would set a minimum wage for rideshare drivers.
Minneapolis City Council Passes Ordinance with Rideshare Worker Protections
In a 7-5 vote, the Minneapolis City Council passed an ordinance that includes a number of rideshare worker protections, including a minimum wage for Uber and Lyft drivers. Mayor Jacob Frey has the opportunity to veto the ordinance and has until next Wednesday, August 23, to do so.
Proposed Ordinance Mandates Minimum Pay for Drivers
The proposed ordinance mandates at least $1.40 per mile and $0.51 per minute within Minneapolis be paid to drivers. Minneapolis is debating the minimum wage as gig workers across the country are advocating for fair wages and job benefits. In recent years, states and cities have attempted to pass legislation regarding the growing “gig economy,” or freelance work through apps like Uber and Grubhub, but have generally met with fierce opposition.
Threats from Lyft and Uber
On Tuesday, Lyft sent a letter to the council saying “Should this proposal become law, Lyft will be forced to cease operations in the City of Minneapolis on its effective date of January 1, 2024.”
Lyft’s Concerns
Lyft, according to a statement sent to CNN Thursday, said the bill would be detrimental to drivers, who would ultimately earn less, “because prices could double and only the most wealthy could still afford a ride.”
Urging Mayor and City Council to Oppose the Move
The company said the bill had been “jammed through the Council” and urged Frey to veto the bill and instead allow time for the state’s rideshare task force to complete its research.
Email Campaign to Oppose the Legislation
Uber sent an email to its riders on Monday, urging them to contact the Mayor and City Council to ask them to oppose the move. Uber said its riders sent over 700 emails on Thursday.
Concerns Expressed by Uber in the Email
In its email, Uber said the legislation could “greatly limit” its ability to remove unsafe drivers from the platform and increase the cost of rides.
Uber’s Warning if the Bill Passes
“If this bill were to pass, we would unfortunately have no choice but to greatly reduce service, and possibly shut down operations entirely,” Uber wrote.
Mayor Frey’s Concerns and Call for More Deliberation
In an email to City Council on Wednesday, Frey said he was concerned about the ordinance.
Support for Drivers Being Paid More
After the ordinance passed on Thursday, Ally Peters, spokesperson for the Office of Mayor Frey told CNN via email, “As the mayor laid out in his letter to the City Council yesterday, he supports drivers being paid more.
Legislation on the Gig Economy
In recent years, states have attempted to pass legislation regarding the growing “gig economy,” or freelance work through apps like Uber and Grubhub.
California’s Prop. 22 and Minimum Earnings Guarantee
In 2020, California passed Prop. 22, backed by more than $200 million from the most influential gig economy companies. The controversial ballot measure allows the companies to treat drivers as independent contractors rather as employees. Though it was a major win for the likes of Uber and Lyft, it did include a minimum earnings guarantee (though it doesn’t include the time a driver spends waiting for a gig).
New York City’s Minimum Pay-Rate for App Food Delivery Workers
In June, New York City announced a new minimum pay-rate for app food delivery workers amid the rise in use of services like Uber Eats and DoorDash since the pandemic. Uber and other food delivery apps sued the city in July, maintaining that the law would hurt delivery workers more than help them.
Correction: A previous version of this article misstated who Uber sent an email to. Uber riders received the email.