Uber and Lyft delayed plans to pull their businesses out of Minneapolis on May 1 after the city council pushed back an effective date to increase the minimum wage by two months.
Minneapolis City Council unanimously passed the extension to July 1 for the increased minimum hourly wage during a Thursday meeting, according to CNN.
The delay gives lawmakers time to hash out a compromise with Uber and Lyft, which said they were going to end operations in Minneapolis if the drivers’ wages were lifted to the equivalent of the local minimum wage of $15.57 an hour.
Uber said in a statement to CNN Thursday that the council’s action “paves the way for all stakeholders to work with [Minnesota] leaders on a statewide solution that raises pay at the state level, protects flexibility and keeps rides affordable.”
Lyft said that it’s “willing to support the Minnesota Department of Labor and Industry study’s recommended $0.89 per mile and $0.487 per minute rates, which would increase current driver earnings by 17% while allowing us to continue to operate within the city. This is the way we can balance the needs of riders, drivers and our community as a whole.”
That study was also a key reason Minneapolis Mayor Jacob Frey, a Democrat, said he opposed the new bill despite supporting a minimum wage for ride-share drivers.
Minneapolis City Council passed an ordinance that amends its regulations for ridesharing employees last summer in a 7-5 vote, which included establishing a minimum wage that says drivers should be paid at least $1.40 per miles and $0.51 per minute — or $5 per ride, whichever is greater — excluding tips.
Without Frey’s support, some council members now want to amend the ordinance and lower the per-mile rate to $1.21, but maintain the proposed per-minute rate of $0.51, CNN reported.
The San Francisco-based ride-hailing service confirmed that it will keep operating in the city until July. Lyft, also based in San Francisco, has said it too will continue operating until July 1.
Uber added in a statement to The Post: “We are encouraged the Council is recognizing the flaws in their incredibly damaging ordinance.”
“However, the fundamental facts remain the same: this ordinance will make rides too expensive for most riders, meaning drivers will ultimately earn less. This is unsustainable for our customers and would force us to shut down operations in Minneapolis when the ordinance does inevitably take effect.”
Council President Elliott Payne and Council Members Katie Cashman and Aurin Chowdhury told CNN affiliate KARE-TV: “Leadership in decision-making entails gathering information, consulting stakeholders and making informed choices, while also embracing uncertainty and adapting to new information.”
“Our goals have and continue to be to ensure fair wages for drivers, stability for drivers and riders, and a healthy, competitive market. With this amendment, we can accomplish those goals.”
Critics of the increased wage requirement have argued that costs will likely spike for everyone, including people with low incomes and people with disabilities who rely on ride-hailing services.
Supporters, on the other hand, say the services have relied on drivers who are often people of color and immigrants for cheap labor.
Representatives for Uber did not immediately respond to noti.group’s request for comment.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
