Uber, Lyft in Minneapolis: City Council approves rideshare ordinance

MINNEAPOLIS (FOX 9) - The Minneapolis City Council passed an ordinance that would give Uber and Lyft drivers a pay bump. This comes as both ride-hailing companies are threatening to leave the city on May 1 because of this ordinance.

The City Council voted 9-4 in favor of the ordinance on Thursday afternoon. Council members Michael Rainville (Ward 3), LaTrisha Vetaw (Ward 4), Emily Koski (Ward 11), and Linea Palmisano (Ward 13) voted no. 

City council members also passed an amendment 12-1 to move back the ordinance's start date by one month. The ordinance will now go into effect on May 1. 

During the meeting, council members considered delaying the vote after learning that the Minnesota Department of Labor industry report on the matter is set to be released on Friday. However, in a 5-8 vote, council members decided against the delay, which Minneapolis Mayor Jacob Frey did not support. 

"The statewide report is literally going to be released tomorrow. It’s irresponsible to pass policy today when we’ll have the data tomorrow," Frey said in a statement following the vote. 

The ordinance would require ride-hailing companies to pay drivers working in Minneapolis $1.40 per mile and 51 cents per minute or $5 per ride – whichever is greater.

Mayor Frey said on Wednesday he supports fair pay for rideshare drivers, including doubling the rate of pay for drivers, but says the current ordinance pushes things too far. Frey further pointed to the importance rideshare apps play for people with disabilities and those who can't afford a car.

Last year, a similar rideshare ordinance was passed with seven votes versus five "nays" and one absent. Frey vetoed the bill and an effort to override the veto came up short. Two of the council members who didn't vote for last year's measure, Andrew Johnson and Lisa Goodman, have been replaced by Katie Cashman (Ward 7) and Aurin Chowdhury (Ward 12). Both Cashman and Chowdhury approved the ordinance during a committee vote last month.

If the council holds last year's "ay" votes and adds Cashman and Chowdhury, that would give the ordinance a nine-vote, veto-proof majority. Frey is hoping council members rethink the ordinance and choose to compromise.

"I have concerns that the ordinance that is being brought forward lacks balance and could potentially result in Uber and Lyft leaving the city entirely," Frey added. "Now, we may have the votes to be able to sustain a veto override. We may not get overridden. Thus, of course, keeping Uber and Lyft in the city but that would not result in drivers getting the necessary bump in pay that I think we all support."

Lyft says it'll leave Minneapolis on May 1

Lyft released a statement after the Minneapolis City Council approved the ordinance, saying the company is "committed to working with any stakeholders on a more sustainable and thoughtful policy solution, but if this particular proposal becomes law, it will force Lyft to cease operations in the City on May 1 (following the amended implementation date)."

"We support a minimum earnings standard for drivers, but it must be done in a way that allows the service to sustainably and affordably operate for riders. 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. 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," the company's statement says. 

Uber will leave Minneapolis, neighboring communities on May 1

In a statement on Thursday, Uber said it would leave Minneapolis and neighboring communities on May 1 if the ordinance takes effect. 

"Uber supports comprehensive statewide legislation that guarantees drivers $35/hr minimum earnings while working and protects their flexibility and independence.  If this ordinance is enacted, we look forward to working with drivers, riders and the legislature to bring rideshare back," the company said in a statement.

Uber also said, "The [City] Council hijacked a state process that proposed real solutions and is in the process of analyzing data to inform a workable earnings standard. The state’s task force made a series of recommendations that should be legislated and collected real data to come up with an appropriate minimum earnings standard."

Drivers react

Ride-share drivers are skeptical Uber and Lyft will make good on their threats to leave Minneapolis.

"I think they’re going to work with us, Uber and Lyft, they know better," said driver Hassan Nureni, as he waited for a trip at Minneapolis-St. Paul International.

"We’ve heard that many, many times. Different cities, different states," said fellow driver Said Mohamed. 

"They will never leave.  Even if it was $5 per mile, they would never leave. They make enough money in this state and every other state."

The rideshare wage ordinance sets much higher per-mile and per-minute prices with the intent to equal the city’s $ 15-an-hour minimum wage for other jobs.

In the 90 minutes of debate before passing, the council agreed to push back the start by one month, to May 1st, to allow other ride-share companies time to get organized in case Uber and Lyft make good on their threats.

Mayor Jacob Frey said he would veto the ordinance when it hits his desk. But nine votes is enough to override that veto and council members said it was time to get this done.

"This fear of veto threatening or saying the world is going to end because Uber is leaving? Well, know that Uber drivers are people," said Councilmember Jamal Osman to the applause of drivers in the audience. "They are people, they put us in here and they’re asking the basics."

Several council members wanted to delay the vote by two weeks in light of a state Department of Labor study on ride-share wages being released on Friday.

Mayor Frey made the same criticism in his reaction, writing that "the statewide report is literally going to be released tomorrow. It’s irresponsible to pass policy today when we’ll have the data tomorrow."

Reaction from the Minneapolis Regional Chamber hit the same criticism:

"By moving forward without the benefit of that information, nine city council members could be taking away a transportation option that has been helpful to underserved communities, people with disabilities, and Minnesotans traveling to events, the airport, work, and appointments around the state."

And the Minneapolis Downtown Council warned that if Uber and Lyft do disappear, so does a massive amenity for the local economy.

"This policy won’t just hurt Minneapolis, it will hurt our region and our state. The last thing we need as people continue to visit Minneapolis – either from around Minnesota or from other states – is to have ridesharing not available. Frankly, it would be embarrassing and would diminish our standing as a world-class destination."