This is What We Have Learned Regarding Uber and Lyft’s Intended Departure from Minneapolis in May
The fate of Uber and Lyft in Minneapolis has become a topic of concern and discussion in recent weeks following the City Council’s decision to mandate higher pay for ride-hailing drivers operating within city limits. This decision has prompted both companies to announce their intention to cease operations in Minneapolis effective May 1, leading the city to reconsider the ordinance it passed. With potential state intervention looming, passengers and drivers are left uncertain about what the future holds.
The Minneapolis City Council’s move to override a mayoral veto and pass the ordinance mandates a minimum rate for ride-hailing drivers, ensuring they receive $1.40 per mile and $0.51 per minute or $5 per ride, whichever is higher, excluding tips, while transporting passengers within the city. Proponents argue that this rate guarantees drivers earn at least the city’s minimum wage of $15.57 per hour, aiming to address concerns about fair compensation and labor exploitation.
However, a study commissioned by the Minnesota Department of Labor and Industry suggested that a lower rate of $0.89 per mile and $0.49 per minute would still meet the hourly wage target. While Uber and Lyft have expressed willingness to comply with the state’s proposed rate, they have firmly stated their intention to withdraw from the Minneapolis market if the higher rate mandated by the city ordinance is enforced.
Uber spokesperson Josh Gold confirmed the company’s decision to halt operations not only in Minneapolis but also in St. Paul and the broader Twin Cities metropolitan area, including the Minneapolis-Saint Paul International Airport, impacting over 3 million residents. Meanwhile, Lyft spokesperson CJ Macklin announced that Lyft would continue serving the airport but cease operations within Minneapolis city limits.
This move echoes similar actions taken by both companies in response to regulatory challenges in other cities, such as Austin, Texas, in 2016. However, the potential departure of Uber and Lyft from Minneapolis has elicited concerns from various quarters, including Minnesota Governor Tim Walz, who emphasized the statewide ramifications and the impact on diverse user groups, including individuals with disabilities, students, and those reliant on safe transportation options.
While state lawmakers could intervene with legislation to override the local ordinance, Governor Walz has urged the Minneapolis City Council to seek a compromise. Council members are now faced with the task of revisiting the ordinance, potentially amending or rescinding it. However, perspectives on the ordinance within the community are divided, with some advocating for fair compensation for drivers, while others fear the loss of convenient transportation options if Uber and Lyft exit the market.
Amidst this uncertainty, residents like Marianna Brown express optimism about alternative ride-hailing options entering the Minneapolis market, while others, like Arianna Feldman, lament the perceived hostage situation created by Uber and Lyft. Meanwhile, drivers such as Jake Clark and Michael Sack voice concerns about potential negative impacts on both drivers’ earnings and passengers’ accessibility to affordable transportation. As the May 1 deadline approaches, all eyes remain on the evolving landscape of ride-hailing services in Minneapolis.
