Uber and Lyft will stop services in Minneapolis after the city council overruled the mayor's veto on a minimum wage law for rideshare drivers. Lyft plans to shut down on May 1, when the law kicks in. Uber will also cease operations throughout the metro area, including the airport, on the same day.
The new ordinance sets driver pay at $1.40 per mile and $0.51 per minute, or at least $5 per trip. The city council aims to align driver wages with the local minimum wage of $15.57 an hour. The mayor's veto was overridden by a 10-3 vote, amid industry opposition.
Recent data shows that the median earnings for drivers in Minneapolis and St. Paul are $13.63. Mayor Jacob Frey had vetoed the ordinance, fearing the companies' departure.
Council Member Jamal Osman stated, "Drivers are human beings with families, and they deserve dignified minimum wages like all other workers."
Critics argue the law will increase ride prices and reduce usage. Lyft contends it will make rides too expensive for most people in Minneapolis, reducing drivers' earnings.
Lyft criticizes the ordinance as flawed and rushed, despite community concerns. Lyft CEO David Risher believes governments shouldn't control pricing.
Lyft seeks a statewide solution in Minnesota to balance rider and driver needs, hoping to return to Minneapolis. Uber says the ordinance will cost 10,000 jobs and affect many users. The company advocates for statewide legislation to ensure fair wages and maintain rideshare affordability.