Lyft and Uber have issued a solid request to cease operations in Minneapolis following the city council’s adoption of a new regulation on Thursday. The law, which outlines a minimum wage requirement for rideshare drivers, was approved by a vote of 7-5. The Minneapolis City Council’s new ordinance encompasses several safeguards for rideshare workers, foremost among them being the establishment of a minimum wage for drivers associated with platforms like Uber and Lyft. Mayor Jacob Frey retains the option to reject the ordinance and has until Wednesday, August 23, to decide.
The proposed ordinance stipulates a payment of no less than $1.40 per mile and $0.51 per minute for drivers operating within Minneapolis. This discussion over minimum wage comes when gig workers nationwide actively advocate for equitable compensation and employment benefits. Over the past years, various states and cities have grappled with legislating the burgeoning “gig economy,” which encompasses freelance work facilitated through apps such as Uber and Grubhub. However, these efforts have frequently encountered vehement opposition.
On Tuesday, Lyft issued a letter to the Council, stating that if this proposal were to be enacted into law, Lyft would regrettably have to halt its operations within the City of Minneapolis. This action would take effect on January 1, 2024.
Apprehensions Regarding Potential Impact of Lyft and Uber’s Efforts to Mobilize Public Support
In a communication sent to CNN on Thursday, Lyft expressed concerns about the bill’s potential negative impact on drivers. The company believes drivers might earn less, as the proposed legislation could lead to a doubling of prices. This would result in only the most affluent individuals being able to afford rides.
The company expressed frustration over what it sees as a rushed process in getting the bill through the Council. Lyft urged Mayor Frey to consider vetoing the bill. Instead, they recommended allowing ample time for the state’s rideshare task force to conclude its research and deliberations.
Uber emailed its riders this Monday, asking them to contact the Mayor and City Council and request them not to support the proposed change. Uber mentioned that on Thursday, more than 700 emails were sent by its riders.
In the email, Uber expressed worries that the new law could make it hard to remove drivers who aren’t safe to ride with and might also make rides more expensive.
Uber stated, “If this bill were to pass, we would unfortunately have no choice but to reduce significantly service, and possibly shut down operations entirely.” The Mayor, Frey, emailed the City Council on Wednesday, expressing his concerns about the new rule.
“He mentioned that This ordinance significantly impacts our city regarding worker protections, public safety, disability rights, and transportation mode shift goals,” he mentioned. After talking to many interested people, Frey said, “It’s obvious that we need more time to discuss this properly.”
Once the rule was approved on Thursday, Ally Peters, who speaks for Mayor Frey’s Office, told CNN in an email, “Just like the mayor explained in his letter to the City Council yesterday, he’s in favor of making sure drivers get better pay.”
Regulatory Battles in the Gig Economy: Examining Prop. 22 and App-Based Worker Laws
Recently, various states have tried to make new laws about the growing ‘gig economy,’ which involves freelance work using apps like Uber and Grubhub. In 2020, California passed Prop. 22, which had support from the most significant gig economy companies and over $200 million. This vote caused a lot of debate because it lets these companies treat drivers as freelancers instead of employees. Even though this was seen as a victory for companies like Uber and Lyft, there was a promise of minimum earnings (though this doesn’t include the time drivers spend waiting for a job).
In June, New York City decided that app-based food delivery workers should get paid a specific minimum rate, especially since more people were using services like Uber Eats and DoorDash because of the pandemic. However, in July, Uber and other food delivery apps took the city to court, saying this law would harm delivery workers more than help them.