Uber and Lyft announced their eventual suspension of services in Minneapolis following the City Council’s authorization of a new city ordinance. Specifically, the ordinance would require Uber and Lyft drivers to be paid a “minimum compensation.”
According to the newly-approved ordinance, a driver for Uber or Lyft must be paid $1.40 for every mile driven while transporting a rider, and $0.51 for every minute a rider is being transported, or $5.00 (whichever is greater). The per mile and per minute rates will be annually adjusted under the ordinance.
The ordinance will take affect on May 1.
Previously vetoed by Mayor Jacob Frey, the ordinance became official on Thursday when the Minneapolis City Council voted to overturn the mayor’s veto.
Prior to the authorization of the ordinance, both Uber and Lyft had warned city leaders that passing such an ordinance would force the companies to discontinue their services within Minneapolis. Despite this, the City Council approved the ordinance.
In a statement released following the City Council’s vote, Lyft said, “This deeply-flawed bill has been jammed through despite major concerns being raised by the community. We support a minimum earning standard for drivers, but it should be done in an honest way that keeps the service affordable for riders.”
The company continued, “This ordinance makes our operations unsustainable, and as a result, we are shutting down operations in Minneapolis when the law takes effect on May 1. We will continue to advocate for a statewide solution in Minnesota that balances the needs of riders and drivers and hope to return to Minneapolis as soon as possible.”
Similarly, Uber released a statement saying, “We are disappointed the Council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded.” Uber said it plans to cease operations throughout the entire metro area May 1, including the airport.
However, Uber did express optimism that a statewide solution would eventually be achieved that “keeps rideshare affordable.”
In a press conference today, Minnesota Rep. Pat Garofalo, R-Farmington, announced he was introducing legislation to make sure Uber and Lyft are not forced to cease operations in Minnesota.
“Failure for the legislature to act will result in Uber being shutdown statewide,” said Rep. Garofalo on X. “We need reasonable Democrats to join Republicans to preempt the Minneapolis City Council’s foolish policy.”
Last year, Gov. Tim Walz used his veto pen for the first time when he rejected a bill that would have set statewide pay standards for drivers who participate in transportation network companies such as Uber and Lyft. At the time, Uber claimed the proposed legislation would “have doubled the cost of a ride, put thousands of drivers out of work and made rideshare less safe.”
When he vetoed the bill, Gov. Walz authorized the creation of a committee to study the rideshare compensation issue. Earlier this month, the committee’s report detailing their findings was officially released by the Minnesota Department of Labor and Industry.
Luke Sprinkel
Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
