Ride-hailing services Uber and Lyft announced they may postpone their planned departure from Minneapolis after the town government decided Wednesday to delay the beginning of a driver Salary increase by two months.
The Minneapolis City Council voted unanimously to implement the ordinance on July 1 as a substitute of May 1.
Some council members said it could give other ride-hailing corporations more time to ascertain themselves out there before Uber and Lyft potentially leave, and it could give Minnesota lawmakers the chance to pass statewide rules on paying ride-hailing corporations.
Councilman Robin Wonsley, the ordinance’s lead creator, said the delay would lead to higher outcomes for drivers and riders and lay a stronger foundation for a fairer ride-hailing industry across the state. She called the present industry model “extremely exploitative.”
Under the regulation, ride service providers must pay drivers at the very least $1.40 per mile and $0.51 per minute – or $5 per trip, whichever is larger – excluding suggestions for the time spent they spend transporting passengers in Minneapolis.
The change is meant to be certain that corporations pay drivers the equivalent of the town’s minimum wage of $15.57 an hour after accounting for gas and other expenses. However, a recent study commissioned by the Minnesota Department of Labor and Industry found that a lower rate of $0.89 per mile and $0.49 per minute would meet the $15.57 goal .
Uber and Lyft officials say they’ll support the lower rate from the state study, but not the town’s higher rate. Uber says it’ll suspend operations throughout the Minneapolis-St. Paul – a seven-county region with 3.2 million residents – while Lyft would only not serve Minneapolis.
Lyft said the town’s rate “will make rides too expensive for most drivers, meaning drivers will ultimately earn less. That’s not sustainable for our customers.”
Uber also warned of declining demand, saying even the federal government study’s rate would “likely still result in lower hourly wages because drivers would spend more time waiting for passengers between trips,” company spokesman Josh Gold said.
Some state legislators have proposed replacing or repealing the town ordinance with a state law.
Previously Uber and Lyft pulled out of Austin, Texas, in 2016 after the town pushed for it Fingerprint-based background checks the driving force as a preventive measure for the drivers. The corporations returned after that Texas Legislature repealed the local measure and passed a law implementing different rules statewide.
At the Minnesota legislative session, Democratic House Majority Leader Jamie Long of Minneapolis said he hoped ongoing negotiations between state and city officials could help resolve the dispute.
“I think we will come to an outcome that keeps companies operating and protects drivers,” Long told reporters. “I really hope we can avoid a preventive measure.”
Uber and Lyft drivers within the Minneapolis area are divided over the problem of driver compensation.
Muhiyidin Yusuf, 49, supports the ordinance. Yusuf said he works about 60 hours each week as an Uber and Lyft driver but still relies on government support, accusing the businesses of creating big profits during his troubles.
“I do all the work. But they take a lot of the money,” said Yusuf, who immigrated from Somalia in 2010. He is one in all many African immigrants within the Minneapolis area who work as Uber and Lyft drivers and have advocated for the fare increase in recent times.
Maureen Marrin, a part-time Uber and Lyft driver, opposes the ordinance. Marrin said she earns a median of $40 an hour driving and doesn’t understand why other drivers make lower than minimum wage.
“I am lucky. I’m retired, I have another source of income, so it’s also easier for me to make more money because I can choose,” Marrin said. “But I’m frightened that they (Uber and Lyft) will leave and get replaced by something that we do not even know what we’re getting.”
