Minneapolis City Council adopted a new minimum wage for ride-share drivers, which could force one company to stop serving the city.
On Thursday, the City Council voted to adopt the rule that would require services to pay drivers $1.40 for each mile driven and $0.51 for each minute carrying a passenger. The rule would only apply to miles and minutes driven within Minneapolis city limits. The minimum rate was among several new rules the legislation includes.
The ordinance narrowly passed by a 7-5 margin. Mayor Jacob Frey has publicly expressed concerns over the legislation and has a week to veto it.
Frey expressed his concerns to KARE-TV.
"We support making sure these drivers get paid more money. They've earned it. At the same time, we've got to be doing some smart and good governance. Need to make sure the policies that we're passing are smart and thoughtful, and worked out ahead of time," Frey said. "We're going to be reviewing the policy first, figuring out what works and what doesn't, and we'll make a decision from there."
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Councilmember Robin Wonsley defended the bill and its timing, saying, "We're depriving drivers thousands of dollars they could be earning."
"We have a good policy in front of us," Wonsley said. "We set a policy and provide high-quality service and it helps to set the bar across the region."
But if enacted, Lyft says it would no longer operate within Minneapolis.
"If it becomes law, drivers would ultimately earn less because prices could double and only the most wealthy could still afford a ride," Lyft said in a statement. "We support a minimum earning standard for drivers, but it should be part of a broader statewide solution that also protects driver independence. That's why we urge Mayor Frey to veto this bill and instead allow time for the state's rideshare task force to complete its research. Overwise, operating within Minneapolis would no longer be sustainable, and we would need to shut down within the city when the law takes effect on Jan. 1."
Lyft says it calculates its pay based on "the estimated time and distance to complete the ride, your travel to the pickup point, demand for rides in the area, and other market factors."
In a statement, Uber said it was "disappointed by the results" of the vote and was "determining next steps."
Uber said the average weighted driver wage is $21.90 an hour, but that can vary based on market.
Minneapolis is far from the only city that has discussed implementing a minimum wage for drivers. Last year, New York City approved raise and fare hikes proposed by the New York City Taxi and Limousine Commission. A judge stopped the measure after Uber said the hikes would cost between $21 million and $23 million each month and could increase rider fares by 10%.
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