Uber Technologies Inc. And Lyft Inc. announced they would cease operations in Minneapolis starting May 1, after the City Council overrode Mayor Jacob Frey’s veto and demanded that rideshare drivers be paid the local minimum wage of $15.57 an hour .
After the veto, Uber said, “We are disappointed that the Council chose to ignore the data and expel Uber from the Twin Cities, putting 10,000 people out of work and leaving many more stranded.” »
The decision sparked significant controversy among area rideshare users as well as Uber and Lyft, who both criticized the decision. Lyft called the bill “deeply flawed” and expressed hope for a comeback if a more favorable statewide solution was found in Minnesota.
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Late last week, Lyft told several of its customers, “We are leaving Minneapolis. Despite our efforts and your support, the Minneapolis City Council passed an ordinance that would make riding the Lyft platform unaffordable for the majority of Minneapolis residents. The decline in rides means that the thousands of drivers who rely on the platform to earn money will end up earning less, creating an unsustainable situation for our customers. As a result, starting May 1, Lyft will be forced to stop offering rides in Minneapolis.
The development follows protests by rideshare and delivery drivers demanding fair wages and working conditions, held on Valentine’s Day. This tension is part of a larger national debate over gig worker rights and fair pay. The ride-hailing companies’ decision to leave Minneapolis follows a major legal settlement in November, in which Uber agreed to pay $290 million and Lyft $38 million to resolve a multi-year investigation by the New York attorney general’s office. York on wage theft, the largest settlement of its kind in the history of the office.
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The Minneapolis City Council, which voted 10-3 to implement the wage law, says the ordinance supports the city’s large East African immigrant community , many of whom work as drivers for these services. They believe this decision opposes exploitation and guarantees fair wages. However, Frey and Minnesota Gov. Tim Walz expressed concerns, emphasizing the need for a solution that benefits both drivers and rideshare companies while keeping the service affordable for riders.
Many have expressed concerns about the broader implications of this situation. Several studies have shown that Uber and Lyft reduce drunk driving incidents. People having to drive their vehicles in the city could mean less parking, which could decrease foot traffic and hurt local businesses.
The companies’ departure from Minneapolis is part of a broader debate over how to regulate jobs in the gig economy and ensure fair pay without sacrificing the availability or affordability of services. The situation highlights the ongoing challenges cities face in balancing the interests of gig workers, businesses and consumers in a rapidly changing landscape of urban mobility and employment.
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This item Uber, Lyft leave Minneapolis after new minimum wage law leaves 10,000 people unemployed: ‘We’re disappointed the council chose to ignore the data’ originally appeared on Benzinga.com
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