Uber and Lyft threaten to pull out of Minneapolis after a City Council vote guaranteed a minimum hourly wage for drivers.
The council voted 10-3 Thursday to override a mayoral veto of an ordinance requiring ride-hailing services to pay drivers a minimum rate of $1.40 per mile and 51 cents per minute to ensure they earn the equivalent of local minimum wage of $15.57. per hour.
The wage ordinance was first approved last week, but was vetoed by Minneapolis Mayor Jacob Frey.
Both Uber and Lyft said they would stop operating in the city when the law takes effect on May 1. Uber added that it would abandon the Minneapolis metropolitan area, including the airport, making it the first metropolitan area in the country without an Uber presence.
The companies argued that they would be forced to pass the increased cost on to passengers, which would result in drivers eventually earning less. In a statement, Lyft called the bill “deeply flawed” and added that “this ordinance would make rides unaffordable for most Minneapolis residents.”
The ordinance is the latest minimum wage law for gig economy workers, as tension grows between workers and gig companies over a fair wage. In September, New York City required tech platforms like Uber, DoorDash and Grubhub to pay food delivery workers around $18 an hour. States like Washington and California, as well as cities like Seattle, have set minimum wage standards for workers over the years.
Critics of the Minneapolis bill include Minnesota Mayor and Gov. Tim Walz, who vetoed a similar bill last year.
Supporters, such as Councilman Jamal Osman, co-author of the law, saying that ride-hailing services in Minneapolis rely heavily on drivers from low-income or immigrant communities.
The companies are expected to push a state bill that could repeal the Minneapolis ordinance. Last week, Minnesota state legislators proposed minimum pay standards for rideshare drivers at a rate slightly lower than that approved by the city of Minneapolis.
