Lyft and Uber are threatening to hail the next black car out of town if a(nother) new law passes requiring them to pay drivers more. But a short look at companies’ histories of staying or returning to cities they once threatened to leave suggests this might be the rideshare who cried wolf.
The Minneapolis City Council passed a measure Thursday that would increase wages for drivers of ride-hailing services to an equivalent of more than $15 an hour — which opponents say may increase costs to customers and fears that Uber and Lyft will follow through on their threats to leave the area altogether.
Council members passed the measure in a 9-4 vote despite Mayor Jacob Frey’s promise to veto the measure due to concerns that the ride-hailing companies could leave Minneapolis and even stop operating throughout Minnesota. If the mayor vetoes the measure, the council could override his action if they have support from at least nine members.
Uber and Lyft have threatened to leave if the measure is approved, but council member Jamal Osman voted for the proposal, saying the fear of their departure “does not make it OK” for companies to rely on drivers — often people of color and immigrants in the Minneapolis area — for cheap labor.
Council member Michael Rainville voted against the measure.
“Minneapolis is not an island,” Rainville said, noting that ride-hailing customers often travel between Minneapolis and other parts of the state.
Ride costs may spike for everyone, including people with low incomes and people with disabilities who rely on ride-hailing services to get around, he added.
Many of the drivers in Minneapolis are African immigrants who have been pushing for higher wages at the state and city levels since 2022.
“We have been waiting for this for a long time. Almost two years,” said Ahmed Ahmed, one of the dozens of ride-hailing drivers who attended the meeting to see the vote and celebrate when the measure passed.
The measure requires ride-hailing companies to pay each driver at least $1.40 per mile and $0.51 per minute for the time spent transporting a rider — or $5 per ride, whichever is greater — excluding tips. This only applies to the portion of the ride within the city.
The formula intends to ensure drivers are paid the Minneapolis minimum wage equivalent of $15.57 an hour. It would take effect on May 1.
Lyft spokesperson CJ Macklin said in an email after the vote that if this measure becomes law, “it will force Lyft to cease operations” in the city on May 1.
“We support a minimum earnings standard for drivers, but it must be done in a way that allows the service to sustainably and affordably operate for riders,” the company said in a statement.
Uber did not immediately respond to a request for comment from The Associated Press.
Seattle and New York City have passed similar policies in recent years that increase wages for ride-hailing drivers. Uber and Lyft still operate in those cities.
The Big Apple was the first metro to set the stage for this movement, setting pay standards for drivers back in 2018. Drivers’ “low pay has persisted despite the rapid growth of the industry,” a study for the New York City Taxi and Limousine Commission pointed out. Ride-share apps were less than happy about the news as at the time Lyft deemed the move “a step backwards for New Yorkers” and Uber released a statement that claimed the new rules would not address traffic in Manhattan and increase fares. In 2022, Washington followed to become the first state to set minimum pay for ride-share drivers.
But even if disgruntled, the companies have stuck around in NYC. Drivers recently received a payout from the largest wage-theft settlement in the history of the NYC office (worth $328 million). The hailing services threatened to stop providing services in California when fighting a bill that would deem drivers employers (and therefore eligible for benefits) and not contractors. The legislation, AB5, remains in place—and so do the companies.
Lyft and Uber made good on their word to leave Austin back in 2016 after disputes over fingerprint background checks and other safety protocol. They returned one year later after the city rolled back the legislation.
The Minneapolis City Council tried to pass a similar measure last year, but the mayor vetoed it. Council members did not have enough votes to override his veto. Minneapolis city council member Robin Wonsley called Frey’s veto in 2023 “an inexcusable betrayal of Minneapolis workers.”
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