(The Center Square) – Ride-sharing services Uber and Lyft say they might leave the city if the Minneapolis City Council enacts a proposed minimum compensation rule.
The ordinance attempts to enact a minimum compensation of $1.40 per mile and $0.51 per minute for the time transporting a rider, subject to annual adjustment as provided by this section, or $5.00, whichever is greater.
Minimum compensation is due only for ride portions occurring within the city and the per-mile and per-minute minimum rates would be tied to the municipal minimum wage every Jan. 1.
In an email sent to frequent customers Monday, Uber said the legislation “could force Uber to leave the city.”
The email said the legislation would “greatly limit our ability to remove unsafe drivers from the platform, including drivers accused of sexual assault, harrassment, impaired driving, or discrimination”, and significantly increase the ride of Minneapolis’ Ubers to possibly more than Manhattan costs.
Minneapolis City Council members Robin Wonsley, Jamal Osman and Jason Chavez support the “Fair Drives Safe Rides” policy.
“These are the standard scare tactics that corporations use to resist regulation,” Wonsley posted on social media. “There is no data behind them.”
Six other members of the Minneapolis City Council haven’t yet responded to a request for comment about their position on the ordinance.
In a letter submitted to the Minneapolis City Council, Lyft Chief Policy Officer Jeremy Bird said if the ordinance becomes law, “Lyft will be forced to cease operations in the city of Minneapolis on its effective date of January 1, 2024.”
The letter said Lyft will work with stakeholders to provide Minnesota rideshare drivers with a minimum earnings guarantee but called this proposal “not a workable solution.”
“It would make rider fares too high, significantly undercut driver earnings by reducing ride volume, and ultimately create too great a safety risk for riders for Lyft to operate in Minneapolis,” the letter said.
Lyft said the Minneapolis City Council didn’t engage with stakeholders to understand the complex challenges.
“Instead, this proposal seeks to impose drastic changes on the rideshare industry without input from the industry participants directly responsible for implementing the changes and is being considered on an unreasonably narrow timeline, even as it is opposed by many drivers and community organizations.”
Lyft requested the city council wait for recommendations of the state’s Committee on the Compensation, Wellbeing, and Fair Treatment of Transportation Network Company Drivers, a task force representing drivers, companies, nonprofits, labor, and Minneapolis.
Lyft said the ordinance “could turn rideshare into a luxury service…” by doubling trip costs within Minneapolis.
“A trip today that would cost $20, could cost $40 next year,” the letter said. “Simply put, most Lyft riders in Minneapolis could no longer afford to use Lyft.”
Lyft says the ordinance requires a 5-days advance notice for all temporary or permanent deactivations, even for drivers who have been reported for a serious safety issue.
“The math simply doesn’t make sense, and it would force us to shut down operations in the city,” the letter said.