MINNEAPOLIS (AP) 鈥 Lyft and Uber have said they will halt operations in Minneapolis because of a new city ordinance that increase wages for app-based drivers, the latest salvo in a longtime fight between gig economy workers and the tech giants.
The city鈥檚 council vote Thursday overrode a mayoral veto of the measure and means ride-hailing companies will have to pay drivers the equivalent of the local minimum wage of $15.57 an hour. It鈥檚 not the first time members of the city council have advocated for a driver pay raise, nor is the issue exclusive to the city or the state.
Here鈥檚 what to know about the Minneapolis measure and gig worker negotiations across the country:
WHAT DOES THE ORDINANCE DO?
The City Council鈥檚 requires ride-hailing companies to pay drivers at least $1.40 per mile and $0.51 per minute for the time spent transporting a rider 鈥 or $5 per ride, whichever is greater. Tips are excluded. In the event of a multi-city trip, that only applies to the portion that takes place within Minneapolis.
Supporters said the measure prioritizes workers鈥 rights over corporate greed.
鈥淭his is a David and Goliath story,鈥 council member Robin Wonsley, who helped author the policy, said in a statement. 鈥淩egular working-class people took on two corporate giants and their political allies, and won.鈥
Fellow council member Jamal Osman said it will keep the companies from exploiting the city鈥檚 East African community for cheap labor.
HOW DID LYFT AND UBER RESPOND?
Lyft and Uber both said they will stop operating in Minneapolis when the ordinance takes effect May 1.
Lyft called the ordinance 鈥渄eeply flawed,鈥 saying in a statement that it supports a minimum earning standard for drivers but not the one passed by the council.
鈥淭his ordinance makes our operations unsustainable,鈥 Lyft said.
Josh Gold, Uber鈥檚 senior director of public affairs, said in a statement that the result will be thousands of people out of work and many riders stranded.
鈥淲e are disappointed the Council chose to ignore the data and kick Uber out of the Twin Cities,鈥 Gold said.
WHAT ARE RIDERS AND DRIVERS SAYING?
Emmanuel Noah, who has been driving for both companies for years, said Lyft and Uber need to listen to the drivers and he hopes their talk of leaving is a bluff.
Drivers aren't making enough to make ends meet right now, especially since they have to pay for their cars and maintenance, he added, speaking outside Minneapolis-St. Paul International airport where he was waiting for a fare.
鈥淭o put food on the table for our families,鈥 he said. 鈥淭hat鈥檚 why we鈥檙e looking for a raise.鈥
Passenger Jake Hay, a frequent traveler who just returned from a business trip, said he typically hails rides to go to and from the airport and also when going out downtown.
It will be less convenient for him if Lyft and Uber leave, Hay said. He doesn't buy into the companies' claims that they can鈥檛 raise wages and still make a profit.
鈥淭hese people are making more money than they鈥檝e ever made in their life,鈥 Hay said. 鈥淚f they鈥檙e going to claim that they can鈥檛 sustain what they鈥檙e doing now and pay these people, they don鈥檛 deserve to be around anyway.鈥
WHAT CAME BEFORE?
The city council previously advanced that Mayor Jacob Frey .
Also last year, the Minnesota Legislature passed a bill that would have mandated higher pay and job security for Lyft and Uber drivers in the state, but Democratic Gov. Tim Walz issued to quash it.
Uber had threatened to offer only premium-priced service in the Minneapolis-St. Paul area and cut off service altogether in the rest of Minnesota if Walz signed the legislation.
Walz said at the time that he was committed to fair wages but that the bill would have dramatically increased rider costs.
Ahead of the Minneapolis override vote, Walz told The Associated Press that he was concerned about the impact of the city ordinance. He warned that the companies would depart and leave a gap for those who depend on the services, including disabled people.
WHAT COMES NEXT?
Both Lyft and Uber nodded to the potential for statewide legislation that would counteract the city ordinance. House Republicans proposed a bill Thursday that would preclude local officials from enacting such regulations.
Walz told AP he hopes the Legislature will seek a compromise that includes fair pay for drivers but also dissuades the companies from leaving the market.
WHERE ELSE HAS THIS HAPPENED?
Gig economy workers have protested across the country to decry low wages and poor conditions, including a last month by ride-hailing drivers.
Some cities have moved to regulate the companies, with mixed results.
Measures in New York City and this year in Seattle established an $18 hourly minimum wage for food delivery workers.
While platforms like Uber Eats and DoorDash in New York City under the new rules, they have there.
In 2016, Austin pushed for of Lyft and Uber drivers as a rider safety measure. Both companies of the city, returning only after the passed a law implementing different rules statewide.
In California an appeals court in ruling that they can continue to treat drivers as independent contractors, meaning they are not entitled to benefits. The state Legislature had passed a law in 2019 forcing them to treat drivers as employees.
President Joe Biden's administration recently on the classification of workers as independent contractors. Companies like Lyft and Uber say the rules wouldn鈥檛 impact how they classify their drivers, though some warn that it could depend on how the Labor Department decides to enforce the standards.
