Ride-shares Uber and Lyft threaten to leave entire state of Minnesota after Minneapolis approved $15 hourly minimum wage for drivers

Ride hailing services Uber and Lyft have threatened to pull out of Minnesota after Minneapolis officials approved plans for a $15 minimum hourly wage for drivers.

The companies warned they could cease operations by May 1, the same day the increase would start. 

Mayor Jacob Frey wants to veto the law, but enough of the city council voted in favor that they could override the veto. 

The plan, approved on Thursday, guarantees drivers $1.4 per mile and 51 cents per minute, with motorists offering wheelchair-accessible vehicles given $1.81 per mile.

However Uber and Lyft say the rates would squeeze their margins too greatly and force them to double fares for riders, which would drive so many away their business model would collapse.

Ride hailing services Uber and Lyft have threatened to pull out of Minnesota after Minneapolis officials approved plans for a $15 minimum hourly wage for drivers

Uber and Lyft warned they could cease operations by May 1, the same day the increase would start

Mayor Jacob Frey has wants to veto the law, but enough of the city council voted in favor to override the veto

The Minneapolis City Council tried to pass a similar measure last year, but the mayor vetoed it. Council members did not have enough votes to override his veto then. 

The state legislature also tried to pass a driver pay plan, though it was vetoed by Governor Tim Walz amid pushback from the platforms. 

'For the second time in less than a year, the bill-sponsors have willfully chosen to ignore offers to collaborate, instead choosing to rush through the most extreme figures possible,' a statement from Lyft reads. 

'We implore Mayor Frey to veto this legislation and instead join our efforts to pass a statewide minimum earnings standard that can balance the needs of all. Otherwise, we will no longer be able to operate in the city once the bill takes effect on May 1.' 

Uber also issued a comment saying it, 'supports comprehensive statewide legislation that guarantees drivers $35/hr minimum earnings while working and protects their flexibility and independence.'

Many of the drivers in Minneapolis are African immigrants who have been pushing for higher wages at the state and city levels since 2022.

'We have been waiting for this for a long time. Almost two years,' said Ahmed Ahmed, one of the dozens of ride-hailing drivers who attended the meeting to see the vote and celebrate when the measure passed.

Minneapolis city council members voted in favor of the plans 9-4

The plan guarantees drivers $1.4 per mile and 51 cents per minute, with motorists offering wheelchair accessible vehicles given $1.81 per mile. Pictured: A ride share driver in Minneapolis

 'We implore Mayor Frey to veto this legislation and instead join our efforts to pass a statewide minimum earnings standard that can balance the needs of all. Otherwise, we will no longer be able to operate in the city once the bill takes effect on May 1,' Lyft stated

Matthew McGlory, who has driven more than 10,000 rides, welcomed the decision and told the Star Tribune that even with a tip, he ends up earning less than half the price the app shows to riders.

'Why should we let the big corporations make all the money when we as little people make nothing?' Driver Marianna Brown asked. 

It was a position reflected among council members who voted in favor 9-4. 

'If employers leave because they are paying sub-minimum wages and companies step in who pay minimum wages, I believe that's a win for our city,' Council Member Jason Chavez said.

Prior to the vote, Frey had urged the council to wait for the publication of a state report that would help explain how much drivers are paid, something which is hard to pin down due to dynamic pricing.

Frey had been advocating a minimum payment of $1.20 per mile and 35 cents per minute. However this demand fell short and the vote proceeded.

More than 300 drivers signed an online petition opposing the pay increase. However, those at the vote hailed the decision as 'historic'. 

Other opponents to the plan include hospitality leaders and some in the disability community who rely on ride share platforms. 

Seattle and New York City have passed similar policies in recent years that increase wages for ride-hailing drivers, but Uber and Lyft still operate in those cities.