Uber and Lyft say they will cease operations in the Minneapolis area to protest a minimum wage ordinance that the city council passed last week.
The bill, which takes effect May 1, would establish a minimum wage of $1.40 per mile and $0.51 per minute for rideshare drivers, with a minimum of $5 per trip. The city council voted to override the mayor’s veto of the ordinance, prompting Uber and Lyft to threaten to leave the area in response.
Minneapolis would be the only U.S. city without Uber and Lyft services if ride-hailing companies follow through on their threat to cease operations on May 1.
The legislation was supported by rideshare driver groups because of low wages and high costs, amid reports that they the salary has fallen.
Eid Ali, nine-year rideshare driver and president of the Minnesota Uber and Lyft Drivers Association, fired complaints from Uber and Lyft that the minimum wage is too high and would make rider fees unsustainable.
“I refuse to believe a $7.3 billion company (Lyft) cannot pay minimum wage to their workers in our city. This is so hard for me to swallow,” Ali said. “Every worker has the right to receive a decent wage. »
Ali said that if Uber and Lyft ultimately leave, they will only take software with them and claimed that other startups, businesses and taxi companies have already expressed interest in trying to replace them.
“The drivers are here. Their cars are here. They’re not leaving,” Ali said. “The reason I think they’re doing this is if they let the drivers here get what they want in this small market, it will have a bigger effect on their larger, more lucrative markets. So they need to stop this. This is what their fight is based on. It’s not about the minimum wage, it’s about the impact it will have on their biggest markets.”
Farhan Badel has worked as a driver for Uber and Lyft since 2018. He said he enjoys working as a rideshare driver, but feels their role in society is severely undervalued.
He said pay for rideshare drivers in the area has declined in recent years, noting that take-home pay for a joint ride between the airport and Mayo Clinic has declined significantly. Badel argued that he was working more hours and being paid less than years ago and that ride-hailing apps were exploiting ride-share drivers who are primarily from immigrant communities in the Minneapolis area.
“Uber and Lyft seem to want to turn this into a confrontation between passengers and drivers, but the reality is that many passengers understand that they are paying too much, that they are overcharged, while we are underpaid. This is our fight,” Badel said. “All we are asking for is fair compensation. They decide what they charge passengers, we have no control over what they charge passengers. All we ask for is a fair wage. If they charge the passenger $90 and only give us $20, that’s what they’re fighting against.
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Republicans in the Minnesota legislature have already introduced a bill to preempt Minneapolis regulations, aimed at keeping Uber and Lyft in the region.
Josh Gold, senior director of public affairs at Uber, said: “We are disappointed that the council chose to ignore the data and expel Uber from the Twin Cities, putting 10,000 people out of work and leaving many more blocked. But we know that by working together with all stakeholders – drivers, passengers and state leaders – we can achieve comprehensive statewide legislation that guarantees drivers a fair minimum wage, protects their independence and keeps carpooling affordable.
A Lyft spokesperson added that they also support preemption at the state level.
“This deeply flawed bill passed despite major concerns raised by the community,” the spokesperson said in an email. “We support a minimum wage standard for drivers, which is why we recently announcement a commitment that drivers will always pay at least 70% of the passenger’s weekly rate after external costs. However, this order would make travel unaffordable for the majority of Minneapolis residents. The drastic drop in rides means that the thousands of drivers who rely on Lyft to make money would end up earning less, creating an unsustainable situation for our customers.
Ride-hailing companies are at odds with regulators in the United States and abroad. There have been several instances where Uber and Lyft have threatened to leave their jurisdictions due to regulations often aimed at solving the problem of low wages and working conditions for drivers.