Uber and Lyft threatened to shut down operations in Minneapolis unless the mayor Thursday vetoed a new rule setting a minimum wage for rideshare drivers.
The Minneapolis City Council passed a motion by a vote of 7 to 5 regulation That’s changing its rules on ridesharing, including introducing a minimum wage that says drivers should be paid at least $1.40 per mile and $0.51 per minute.
“A minimum compensation is only due for the portion of the ride that occurs within the city,” Minneapolis government officials wrote in the ordinance, which is scheduled to take effect on January 1, 2024.
However, Uber and Lyft are counting on Minneapolis Mayor Jacob Frey to veto the new rule.
Frey has until August 23 to prevent the regulations from taking effect from 2024. If he doesn’t intervene, the world’s two largest ridesharing companies have said they will move their businesses elsewhere.
“Should this proposal go into effect, Lyft would be forced to cease operations in the city of Minneapolis on January 1, 2024,” the company, known for its distinctive pink logo, wrote to the city council on Tuesday. according to a letter received by the post office.
The company said it “could not avoid such price hikes if regulation nearly doubled our operating costs.”
Lyft spokesman CJ Macklin added that a bill of this nature would hurt drivers financially rather than increase their revenue, “because prices could double and only the wealthiest could afford a ride.”
“A ride that would cost $20 today could cost $40 next year,” Lyft warned in its letter, noting that lower demand for its services would impact drivers’ earnings.
“During the last quarter, drivers on the Lyft platform in Minneapolis warned an average of $37+ per hour used, including tips and bonuses. But this proposal would reduce ride demand by nearly two-thirds, meaning drivers would earn significantly less overall, even under the higher per-mile and per-minute rates set out in the bill,” the memo reads.
“This bill was brought through the council in less than a month without regard to its implications,” said company spokesman Macklin.
“So we’re calling on Mayor Frey to veto this bill and instead give the state’s rideshare task force time to complete its research.” Exaggeratedly, operations within Minneapolis would no longer be sustainable and we would have to close within the city when the law goes into effect on January 1.”
Uber also reportedly warned its drivers in the area in an email on Monday about the upcoming new rule, urging them to contact Mayor Frey and the city council and urge them to defy the ordinance.
In his email, received from CNN businessUber said the legislation could “significantly limit” its ability to remove unsafe drivers from the platform and increase ride costs.
“Unfortunately, if this law were passed, we would have no choice but to severely limit service and possibly shut down operations altogether,” Uber wrote.
In a statement shared with The Post, an Uber spokesperson said the company is “disappointed with the results of yesterday’s voting and the entire process in Minneapolis,” noting that Uber “never said definitively that we were going to leave Minneapolis “.
Public statements were included in the “documents” of the regulation and show that even ride-sharing customers in the land of 10,000 lakes are not enthusiastic about the new regulation.
“I use Uber and Lyft a lot and I talk to the drivers all the time. Of course they want to be
paid more. We would all do that. But there are more riders than there are riders, I hear. manufacturing
More expensive trips will reduce ridership and put many drivers out of work,” a man named Mac Case wrote in one E-mail to a Minneapolis City Councilman.
The Minneapolis Regional Chamber, a nonprofit group dedicated to supporting the city’s economy, also co-wrote one letter to the city for its “major concerns about the proposed regulation,” which included concerns that “the prices of ride-sharing services would increase as a result of this regulation, risking that the people who rely most on these services be priced.”
The organization pointed to common use cases for apps like Uber and Lyft, such as many city dwellers needing a commute outside of the Twin Cities’ public transit system, Metro Transits, or operating hours, “particularly in the hospitality industry.”
“In addition, we would like to note that Metro Transit’s Guaranteed Ride Home program, a program designed to ensure commuters have access to transportation in an emergency, relies on ride-sharing services when other modes of transportation are unavailable.” it in the letter signed by the President and CEO of the Minneapolis Regional Chamber.
Frey, meanwhile, has expressed reservations about the move and hinted he could go ahead with the veto.
“This ordinance will have a significant impact on our city in terms of worker protection, public safety, the rights of persons with disabilities and modal shift goals,” he wrote to the city council on Wednesday.
After meeting with a broad group of stakeholders, Frey said, according to CNN, “It is clear that we need to allocate more time for deliberations.”