Lyft and Uber have announced that they will discontinue their services in Minneapolis following a council decision on Thursday to override a mayoral veto. This decision mandates that ride-hailing companies raise driver earnings to at least the local minimum wage rate of $15.57 per hour.

In a statement, Lyft expressed criticism of the ordinance, describing it as flawed. While they agree with setting a minimum earning standard for drivers, they do not support the version approved by the council.

“Lyft stated that the service must be conducted ethically in order to maintain reasonable prices for riders. However, this ordinance renders our operations unviable, leading to our decision to cease operations in Minneapolis once the law goes into effect on May 1st.”

At the moment, Uber has not replied to a comment request. However, various news sources have stated that they released a statement mentioning that they will also cease operations on that day.

Both corporations made a commitment to advocate for statewide laws that would opposed the Minneapolis decree, and House Republicans in the state introduced a bill on Thursday that would prevent local limitations on ride-hailing companies.

Despite Mayor Jacob Frey’s threat to veto, the City Council approved a measure last week with a 9-4 vote. The measure specifies that ride-hailing companies must compensate drivers with a minimum of $1.40 per mile and $0.51 per minute for each trip, or a flat rate of $5 per ride, whichever is higher. This rule only applies to trips made within Minneapolis, even if it is part of a larger journey.

Opponents of the legislation argue that expenses will likely increase for all users, regardless of income or disability, who depend on ride-hailing services. Proponents claim that these services have been dependent on utilizing primarily minority and immigrant drivers for low-cost labor.

According to a statement from council member Jamal Osman, who helped create the policy, drivers are people with loved ones and should receive fair minimum wages like any other employee.

Osman stated that the recent vote demonstrated the Minneapolis City Council’s stance against the exploitation of the East African community, as well as all communities, for the sake of cheap labor. He emphasized that the Council prioritizes workers over corporate greed.

Tim Walz, the Democratic Governor, rejected a measure in the previous year that aimed to increase the wages of Uber and Lyft drivers. He expressed his concern to The Associated Press on Wednesday, stating that he is worried about the impact on individuals who rely on these services, especially those with disabilities.

He expressed his belief that the companies would withdraw their support, leaving a gap that cannot be filled.

Walz expressed his desire for the Legislature to find a middle ground that addresses both fair compensation for drivers and prevents the companies from exiting.

Both Seattle and New York City have implemented comparable policies in the past few years to raise the pay for ride-hailing drivers, yet Uber and Lyft continue to operate in those urban areas.

Source: wral.com