Uber reups threat to leave Minneapolis May 1 after City Council overrides Frey's rideshare ordinance veto
MINNEAPOLIS — It took just a few minutes for the Minneapolis City Council to override the mayor's veto, and confirm a pay boost for rideshare drivers.
Uber and Lyft said that means they'll soon stop offering rides not just in Minneapolis, but the entire metro.
The council voted 10-3 in favor of the override. Mayor Jacob Frey says the ordinance passed last week by council members in a 9-4 vote was "dramatically off."
"Today's vote showed Uber and Lyft and the mayor that the Minneapolis city council will not allow the East African community or any other community to be exploited by cheap labor," said Jamal Osman, a councilmember who co-authored the policy.
The ordinance means Uber and Lyft would have to pay drivers minimum wage, more than $15 an hour.
After the vote, Uber immediately released a statement saying they would stop service in the entire metro area on May 1. That includes the airport.
"Why would they want to leave when they have a lucrative market? We have a lot of industry going on," said Matthew McGlory, driver.
"And should they leave, we've been in touch with several rideshare businesses and are more than happy to pay the city's minimum wage and fill the void," said Robin Wonsley, councilmember.
But Frey doesn't agree.
"We have a lot of work to do between now and May 1," said Frey.
Frey said the council largely ignored data from a state study detailing recommendations on what rideshare drivers should be paid. He feels the void felt if Uber and Lyft leave, can't be understated.
"Everyone wants to see Uber and Lyft drivers get paid more. But getting a raise doesn't do a whole lot of good if you lose your job," said Frey. "There will be a massive impact felt by our region."
Frey said he would like to work with all parties to come to a solution before May 1.
Just a couple of hours later, some Republican lawmakers announced a bill to pre-empt the city council's ordinance
Uber, Lyft affirm plan to end services in Twin Cities when ordinance takes effect
Both rideshare companies released statements condemning the City Council's vote. Uber says it will leave the entire metro area, including the airport, on May 1 when the ordinance becomes law.
"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's statement said. "But we know that by working together with all stakeholders — drivers, riders and state leaders — we can achieve comprehensive statewide legislation that guarantees drivers a fair minimum wage, protects their independence and keeps rideshare affordable."
Lyft says it'll shut down operations in Minneapolis on May 1, but it's unclear if services will be affected in the wider metro area, like Uber's plan.
"This ordinance is deeply flawed, and the rates it sets are far higher than what the state's study suggested," Lyft's statement said. "We support a minimum earning standard for drivers, but it should be done in an honest way that keeps the service affordable for riders. 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."
Republicans at the Minnesota Capitol say they're willing to cross the aisle to come to a solution.
"This is too important of an issue to allow politics to get int he way of things. We need to maintain Uber and Lyft services for all Minnesotans, and we're here to help the DFL reverse the decision of the Minneapolis City Council," Rep. Pat Garofalo, R-Farmington, said.
Thursday night, DFL Majority Leader Erin Murphy said they were working to give drivers a raise, "while also ensuring the ability of rideshare companies to continue operating here."
Despite threats in the past, Uber and Lyft have never left a city because of a minimum pay measure.
Driver Joe Pierce says he doesn't think the companies will carry through on their threat because he sees the demand firsthand.
"There's 10,000 drivers, but there's hundreds of thousands of passengers. They rely on it every single day," Pierce said. "Services like these need to operate in our market."
Disability advocate Michael Sack says the uncertainty is stressful for those who rely on the services.
"If Uber and Lyft leave Minneapolis like they have threatened to do, it would eliminate a pair of services that provide essential rides to individuals who have disabilities," Sack said.
Other services may fill void if Lyft, Uber leave
The ordinance has created concern among downtown business groups like the Minneapolis Downtown Council, citing worries about the city's future ability to host events like the Big Ten Tournament.
Raising wages or not, Minneapolis residents say it's a tough call.
"I think it would be tough for us, like we're trying to come downtown, we want to have a good time, we want to be able to, you know, have a few drinks, enjoy a good time with friends, like I want to be able to take Uber or Lyft to get home not have to worry about driving, figuring that stuff out," said resident Stephen Prica.
"It's worth whatever they need to get paid to just do it. Because at the end of the day, we got to get home safe and get home to our families,"' said resident Evan Kornacki.
There are other rideshare services willing to step up to the plate if there's an absence of Uber and Lyft. The app InDrive is big in other parts of the world and is starting to roll out in the United States, but it can't commit to coming to Minneapolis just yet.
"There are different regulations, insurance requirements, state rules and licensing that need to go through," said InDrive's Adam Warner. "So if a company is able to pull those things together in a relatively short amount of time, I do see that there's an opportunity."
Representatives from another rideshare app, Empower, say they're ready to go and "have complete confidence that there will be no disruption in access to ridehail services should Uber and Lyft leave Minneapolis."
Frey's fraught relationship with the City Council
This is the second time the council has overridden one of Frey's vetoes in five weeks. On Feb. 8, the council overturned Frey's veto of its resolution calling for a permanent cease-fire in Gaza. In response, Frey issued a proclamation stating he supports a cease-fire, but labeled the council's resolution as "one-sided."
In the 2021 election, Frey was re-elected on a ballot that included an amendment to change the city's governance system to a "strong mayor" structure, which passed.
The "strong mayor" structure essentially gives the mayor more authority over general executive and administrative systems, stating "neither the City Council nor any Council committee or member may usurp, invade, or interfere with the Mayor's direction or supervision of the administration."
Frey said back in November 2021 the change would "be a clarity as to who controls what."