Uber and Lyft say they will stay in Minnesota

MINNEAPOLIS (FOX 9) - After weeks of threats and negotiations, ride-hailing companies Uber and Lyft say they will continue service in Minnesota after state lawmakers reached a deal on a minimum wage for drivers.

In separate statements on Sunday, both ride-hailing apps said the legislation passed by the Minnesota Legislature was enough to keep them in Minnesota.

The new state law overrode the Minneapolis ordinance that initially caused Uber and Lyft to threaten to leave.

In March, the Minneapolis City Council approved an ordinance, overriding a veto by Mayor Frey, requiring ride-hailing companies to pay $1.40 per mile and 51 cents per minute to drivers. In response, Uber and Lyft threatened to end service in Minneapolis when the ordinance went into effect on May 1.

The companies later countered, backing a rate proposed in a state study on ride-hailing driver wages: 89 cents per mile and 49 cents per minute. It should be noted that the state study found that ride-hailing app drivers made below minimum wage when accounting for expenses – though the apps have been critical of the accuracy of said study.

The Minneapolis council eventually delayed the implementation of its ordinance until July 1, to allow more time to tweak the legislation. Some council members also hoped the delay would give new ride-hailing app startups time to get up and running.

At the same time, state lawmakers were working on a compromise bill that would set a rate for drivers statewide. On May 6, lawmakers announced a "compromise" that would pay drivers $1.27 per mile and 49 cents per minute. Again, Uber and Lyft balked, saying they would leave the entire state if those rates went into effect. Though some legislative leaders felt this was a bluff by the companies to continue negotiations, pointing to the fact that Uber and Lyft already operate in other jurisdictions with the same or higher rates for drivers.

After further negotiations over the weekend, lawmakers reached a new deal: $1.28 per mile but only 31 cents per minute. Uber and Lyft both issued statements on Sunday, saying the agreed-upon rate would be enough to keep the companies operating in Minnesota.

"We have long supported a minimum earnings standard and increasing driver pay in smart, deliberate ways, which is why earlier this year we announced a new commitment where drivers will always make at least 70% of the weekly rider fares after external fees," a Lyft spokesperson wrote. "This legislation builds on those efforts and marks an important compromise that allows Minnesota rideshare drivers to keep earning with Lyft. Through direct engagement with all stakeholders, we have found enough common ground to balance a new pay increase for drivers with what riders can afford to pay and preserve the service. We look forward to continuing to serve both riders and drivers across the state for the foreseeable future."

Uber added in its own statement: "We applaud the tens of thousands of riders & drivers who sent close to 100,000 emails to legislators - your voices were heard.  While the coming price increases may hurt riders and drivers alike, we will be able to continue to operate across the State under the compromise brokered by the Governor."