Minneapolis council pulls vote on funds for startup ride-hailing apps

The Minneapolis City Council's budget committee removed an item from its agenda on Monday to provide funds to help startup ride-hailing apps, as Uber and Lyft threaten to leave the city over a new ordinance.

The measure would provide $150,000 to prop up some apps working to get started in Minneapolis.

Multiple apps are attempting to launch in Minneapolis after the council approved an ordinance giving ride-hailing drivers a pay raise. Recently, a state report found that, after accounting for expenses, Uber and Lyft drivers made below the city's minimum wage.

However, at the start of the discussion of the measure, Council Member Robin Wonsley said she would pull her motion. As Wonsley explained, council members were looking to help new ride-hailing businesses get a start in the city – but didn't want to do so at the expense of other small businesses seeking funds. But, after hearing from city staff, it seems that current city programs to help small businesses have enough funding to cover ride-hailing startups.

Frey highlights the impact of Uber and Lyft leaving

Mayor Jacob Frey also hosted a news conference on Monday with local business and hospitality leaders, plus advocates for the elderly and disabled, to highlight the impact of the new legislation.

Frey vetoed the legislation initially, but the council overrode his veto.

Since then, Frey has pushed council members to make changes to the ordinance, warning about the ripple effect of Uber and Lyft pulling out of the city could have.

FOX 9 has also spoken with people with disabilities who tell us they rely on Uber and Lyft to get around.

For now, council members are working with MetroMobility to fill the gap after May 1.

What's next?

This Thursday, the council is set to discuss changes to the pay raise ordinance.

It's unclear what, if any, changes could be made to the ordinance.

Last week, in a letter to the council, Lyft offered a compromise, saying if the council changed its ordinance to meet state recommendations. Currently, starting May 1, ride-hailing app drivers would make $1.40 per mile and 51 cents per minute.

Uber has also expressed support for matching the state recommendation.

In the state report, that found Uber and Lyft drivers were underpaid, the authors recommended wages of 89 cents per mile and about 49 cents per minute for drivers.

"Lyft is offering a compromise that would truly raise driver pay while saving this vital transportation access and driver earning opportunity," Lyft's Chief Policy Officer Jeremy Bird wrote. "We are asking the City Council to work with us to prevent a disastrous outcome for riders, drivers, and the City of Minneapolis."

No vote is expected on Thursday. Any vote on the changes likely wouldn't come until the final scheduled meeting of the month, on April 25.