Will rideshare companies leave Minneapolis? Experts say not so fast
MINNEAPOLIS — Now that the Minneapolis City Council has passed an ordinance guaranteeing minimum pay for rideshare drivers, there is concern about the companies increasing their fees or leaving the city — or state of Minnesota — altogether.
If the ordinance becomes law, both Lyft and Uber say they'll pull services from the city on May 1, which is the new implementation date following an amendment by the council.
"The council hijacked a State process that proposed real solutions and is in the process of analyzing data to inform a workable earnings standard," Uber said in a statement. "The state's taskforce made a series of recommendations that should be legislated and collected real data to come up with an appropriate minimum earnings standard."
Lyft said it supports a minimum earnings standard for drivers.
"But it must be done in a way that allows the service to sustainably and affordably operate for riders," Lyft said in a statement. "For the second time in less than a year, the bill-sponsors have willfully chosen to ignore offers to collaborate, instead choosing to rush through the most extreme figures possible. We implore Mayor Frey to veto this legislation and instead join our efforts to pass a statewide minimum earnings standard that can balance the needs of all. Otherwise, we will no longer be able to operate in the city once the bill takes effect on May 1."
"I've seen these threats before and they're still driving In Seattle, and they're still going across the state of Washington," said Kerry Harwin with the Drivers Union in Seattle.
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The Drivers Union pushed for changes, leading to a citywide ordinance for Seattle in 2020 and a statewide law for Washington in 2022.
"We were able to take that and go statewide a couple of years later in 2022. And so now drivers across Washington State are the best-paid drivers in the nation with a statewide minimum pay for per mile and per-minute work," Harwin said. "We see record profits for Uber and we see this at the same time the passengers are getting charged more, and drivers are getting paid less and so it's not a mystery where the money is going."
Seattle passed $1.33 per mile, $0.57 per minute and a $5 trip minimum for drivers. Washington's statewide law promises drivers a little less at $1.17 per mile, $0.34 per minute and a $3 per trip minimum. What the Minneapolis City Council passed Thursday compares more to Seattle at $1.40 per mile and $0.51 per minute, $5 trip minimum.
"The companies brought them this upon themselves, to be honest with you," said Sergio Avedian, Senior Contributor to The Rideshare Guy. "There has been a working plan in Seattle and Washington State for the last four years and the same thing happened then. Uber and Lyft threatened to leave Seattle. They didn't."
Avedian has been following the push for better pay and benefits for rideshare drivers across the country.
He says the only time the services left a city was when Austin tried to require fingerprinting drivers.
"Within three days, there was another app called Ride Austin, which took over what Uber and Lyft were doing so, I think it's a bluff," he said. "It's been working in Seattle, you know, hell did not freeze over. The world the did not come to an end, granted Seattle passenger rates did go up. The rates will go up. I don't think they're gonna double what they were before. But the rates have been going up anyway."
Avedian believes a subtle sign of a potential compromise came when the Minneapolis city council moved the effective date of their ordinance to May 1.
"If it was April 1, I would have bet they would have left for a short while. Now that it's May 1, I think there's going to be some backroom dealings going on," he said. "I think they bought some time to let cooler heads prevail and have everybody come to their senses."