Mar 14, 2024 - News

Uber threatens to pull out of Twin Cities metro over Minneapolis' new driver pay ordinance

A Black man in a blazer and dress shirt and a Black woman with glasses and a blazer stand at a podium during a press conference. The man on the left is speaking and gesturing with his right hand.

Minnesota Uber and Lyft Drivers Association president Eid Ali (left) and Minneapolis City Council member Robin Wonsley (right) address reporters after a vote to enact a driver pay ordinance. Photo: Kyle Stokes/Axios

Uber threatened to stop serving the entire Twin Cities metro later this spring because of a new Minneapolis ordinance significantly increasing rideshare driver pay that's now set to take effect May 1.

Why it matters: The departures of Uber and Lyft would leave as many as 8,000 Twin Cities drivers short of work. But many drivers doubt these threats, and see the new ordinance as making it possible to earn a living while driving for an app in Minneapolis.

Driving the news: Uber's latest escalation came after council members Thursday voted 10-3 to override Mayor Jacob Frey's veto, ensuring the new pay ordinance will become law on May 1.

  • Lyft also reiterated a pledge to leave Minneapolis over the ordinance.

What they're saying: "Every business in Minneapolis has paid a $15 minimum wage for years. Uber and Lyft are not exempt from that policy," said ordinance co-author Robin Wonsley.

The intrigue: The action may now shift to the Minnesota Legislature, where lawmakers are considering new statewide regulations on ridesharing, including minimum pay for drivers.

  • Before the vote, Gov. Tim Walz told Axios he may want the state's proposal to pre-empt Minneapolis' new ordinance.
  • After the vote, Frey said he supports local control and opposes pre-emption in general, but would be working with the governor and lawmakers to explore options, noting the ordinances' potential ramifications for the entire region.
  • Several Republican state lawmakers announced they would file legislation to block the ordinance from taking effect.

The other side: In a statement, Uber spokesperson Josh Gold said the company remains open to "comprehensive statewide legislation that guarantees drivers a fair minimum wage, protects their independence and keeps rideshare affordable."

Between the lines: Uber and Lyft have remained in other U.S. jurisdictions that have also imposed driver pay floors, like Washington state and New York.

  • Gold has argued Uber can abide by these standards because they came as part of broader compromises that, among other things, gave rideshare companies some certainty that their drivers are independent contractors, not full employees.

How it works: Starting May 1, the new ordinance will set a citywide pay floor for rideshare drivers: $1.40 per mile and 51 cents per minute.

  • The rate applies to any portion of a trip within the city limits.
  • Rideshare drivers must receive at least $5 per ride.
  • If a rider cancels a trip after a driver has already left for pickup, the driver must receive 80% of any cancellation fees charged.

Related reads: Assessing Uber and Lyft's warnings about leaving

Editor's note: This story has been updated to include more information and reactions to the new ordinance.

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