Uber, Lyft promise to leave Minnesota entirely after state ride-hailing 'compromise'
MINNEAPOLIS (FOX 9) - After Minnesota state legislators and Minneapolis council members announced a compromise on wage legislation for Uber and Lyft drivers, the ride-hailing companies are now threatening to leave Minnesota entirely..
In a statement, Lyft says if the compromise legislation the company will leave the entire state -- not just Minneapolis.
"Lyft continues to support a minimum earnings standard for drivers," a statement from a Lyft spokesperson reads. "However, as was the case with the extremely-flawed Minneapolis ordinance, the proposed rates in the state bill would be incredibly damaging for both riders and drivers. Rides would become unaffordable for most across the state, not just in Minneapolis, and drivers would earn even less. It would make the service unsustainable in Minnesota, and we would be forced to shut down throughout the state, should it pass."
Uber released a similar statement.
The state bill will raise ride-hailing driver wages to $1.27 per mile and 49 cents per minute. That's lower than the wages in the Minneapolis ordinance, $1.40 per mile and 51 cents per minute, but below the numbers Uber and Lyft have said they would support: 89 cents per mile and 49 per minute – which were the rates recommended by a state report.
Rideshare compromise eyed by Minnesota lawmakers
A week after the Minneapolis City Council extended the enactment of an ordinance that would raise wages for drivers – a move that led Uber and Lyft to threaten to leave if approved – Minnesota legislators are hoping to create a policy that would guide the rideshare industry for the entire state.
That state report found that Uber and Lyft drivers on average made below minimum wage after accounting for expenses.
Previously, Lyft had only threatened to leave Minneapolis, once the pay raise ordinance went into effect, but had planned to continue service in the rest of the metro and state. Uber had said it would leave Minneapolis and potentially the entire metro because of the ordinance.
Rep. Jamie Long (DFL-Minneapolis) says the newly agreed-upon rates match rates in other states and are below rates in Washington state -- where both Uber and Lyft still operate.
When asked, Rep. Long said he believes Lyft's threats are a bluff by the company to negotiate a better deal.
"We know the companies have said the same thing in other states," Rep. Long said. "They've said that they'd leave at certain rates, and they've stayed and been able to operate profitably."
Uber and Lyft both complained they weren't involved in the negotiations. Republican lawmakers also criticized Democrats for not involving companies in the legislative process.
"The amount of damage that can be done by not taking action on this," argued Rep. Pat Garofalo (R-Farmington). "It’s more important than any other piece of legislation this session."
Rep. Long says he spoke with both Uber and Lyft on Monday but did not consult the companies before reaching a deal on the rates in the current bill. He believes he has enough votes to get the bill through the state legislature. Long says the Minneapolis council members have agreed to drop their rate to match the state legislation.
Minneapolis delayed putting its ordinance into effect until July 1.