Uber, Lyft to stop services in Minneapolis after city council passes wage requirement for rideshare companies

Minneapolis City Council recently voted to enforce a wage requirement for ridesharing companies like Uber and Lyft within city limits, a move that has prompted both companies to announce their plans to cease operations in the city once the ordinance takes effect on May 1,  

According to the Associated Press, under the new ordinance, rideshare companies are mandated to pay drivers a minimum rate, which was set at either $1.40 per mile and $0.51 per minute or $5 per ride, whichever amount is greater. This wage requirement applies to all transportation services provided within the city of Minneapolis. 

The ordinance was intended to ensure that rideshare drivers are being compensated at the same rate as the city’s hourly minimum wage, which is currently set at $15.57 per hour. Jamal Osman, the City Councilman who co-authored the ordinance, emphasized the importance of this, while also highlighting how a large number of drivers are immigrants from Africa. 

“Drivers are human beings with families, and they deserve dignified minimum wages like all other workers... the Minneapolis City Council will not allow the East African community, or any community, to be exploited for cheap labor.” 

However, in response to the artificial increase in labor costs resulting from the ordinance, rideshare giants Uber and Lyft have threatened to suspend their services in Minneapolis. An Uber spokesperson confirmed the company’s intentions to discontinue its operations in the city once the ordinance is implemented on May 1. 

The move echoes a similar action taken by both companies in Austin, Texas when the city proposed fingerprint-based background checks for drivers. Subsequently, the Texas state legislature intervened, overriding the city’s measure, which led to Uber and Lyft resuming their services in Austin.