Rideshare Giants Exit Twin Cities as Council Mandates Minimum Wage for Drivers
Uber Technologies (UBER) and Lyft (LYFT) announced on Friday their decision to cease operations in Minneapolis effective May 1, following the city council’s approval of a minimum wage requirement for rideshare drivers. The council’s 10-3 vote to override Mayor Jacob Frey’s veto mandates a minimum wage of $15.57 per hour for rideshare drivers in the city.
Expressing disappointment, Uber criticized the council’s decision, stating it disregarded pertinent data and would result in the displacement of approximately 10,000 workers and inconvenience for many residents. Similarly, Lyft labeled the bill as “deeply-flawed” and expressed a desire to return to Minneapolis while advocating for a statewide resolution in Minnesota.
This development follows protests by rideshare and delivery drivers on Valentine’s Day, highlighting concerns regarding fair pay and working conditions. Moreover, a significant legal settlement was reached in November, with Uber agreeing to pay $290 million and Lyft $38 million to resolve a wage theft investigation, marking one of the largest settlements in the New York Attorney General’s history.
Despite concerns that increased wages might lead to price hikes and decreased consumer demand, a study by the Minnesota state’s Department of Labor and Industry concluded that such outcomes were improbable, suggesting the companies are unlikely to significantly alter pricing structures or commissions.
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