Uber and Lyft to stop operations in Minneapolis over minimum wage law

Both Lyft and Uber have indicated their intention to stop operating in Minneapolis. The announcement follows a contentious year-long back-and-forth with city authorities over minimum wage compensation for drivers for Uber and Lyft. 

A bill requiring Uber and Lyft to pay drivers a minimum of $1.40 per mile and $0.51 per minute was passed by the Minneapolis city council in August of last year. The city estimates that these rates would allow drivers to make the $15.57 minimum wage after expenses. The bill was passed in cooperation with a coalition of ride-hail drivers. 

Because drivers for Uber and Lyft are only paid when they deliver a ride to a customer, not while they wait, minimum wage estimates do not take this into account. At the moment, Minneapolis drivers earn a median of $13.63 per hour after expenses, according to data from the state. 

Shortly after the minimum wage bill was passed, Minneapolis Mayor Jacob Frey vetoed it, saying “this ordinance needs more work.” Council members then brought forward another measure around driver pay, which passed last week in a 9-4 vote, despite Frey saying he’d veto that one, too. Then, on Thursday, the city council voted to override that mayoral veto. 

Uber and Lyft have a history of opposing legislation pertaining to driver protection and minimum pay in many US cities, such as New York, Seattle, and Denver. Uber, Lyft, and other gig businesses invested almost $200 million in California to pass a ballot initiative guaranteeing that drivers would not be categorized as workers by the state.  

Because the companies view their drivers as independent contractors, the drivers are responsible for covering their own work-related expenses, such as gas and car upkeep. The companies do not provide health insurance, sick pay, or any other employee benefits to drivers.