Uber and Lyft leaving Minneapolis? Ride-hail apps oppose new ordinance

Ride-hailing apps Uber and Lyft may end service in Minneapolis as the city council considers an ordinance that would ensure drivers make minimum wage.

Mayor Jacob Frey vetoed the ordinance last August after the council initially approved it. Last year, the council didn't have enough to override the veto. But this year, with new council members, there may be enough votes to override a veto.

The city council's Business, Housing, and Zoning Committee heard and approved the renewed ordinance on Tuesday. It is scheduled to be heard by the full council on March 7.

If approved by the full council, the ordinance would guarantee drivers working within the Minneapolis city limits make the minimum wage of $15 per hour. The ordinance would require drivers to earn $1.40 per mile and 51 cents per minute or $5 per ride -- whichever is greater.

In a statement, Lyft argued its drivers already make a fair wage but said: "The Council’s proposed bill, however, ignores economic reality. It pushes the same egregious mandates that were vetoed by the Mayor last year, and it could make rides on Lyft too expensive for too many. Should it become law, Lyft would be forced to cease operations in Minneapolis and possibly the rest of the state when it takes effect."

In a letter to council members, Lyft claims the median driver in the Twin Cities region earns $25.94 per "engaged hour" after expenses like gas. That figure includes tips and other bonuses.

But, drivers who spoke for the bill at Tuesday's hearing, say they aren't being treated fairly.

"I believe in working and working hard and that’s what I’ve been doing," said one driver speaking to the council. "But what’s missing in this equation is fairness."

The committee passed the ordinance by a vote of five to one, sending it to the full council.

Council Member Aurin Chowdhury apologized before the vote, expressing concern over the pay disparities highlighted by drivers. "Even more glaring to see some of the images that you brought forward... of a ride costing $93 and just getting paid $11.49 for that ride and driving 18 miles, that’s not right," said Chowdhury.

Council members supporting the ordinance say it's necessary to align with minimum wage requirements that other businesses already comply with.

Uber and Lyft say the increases are not realistic for them to stay in business in Minneapolis. Lyft puts it in the strongest terms, warning that the company may leave the city, potentially the entire state, as early as April if the ordinance is approved.