How to avoid an Uber/Lyft disaster

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Let’s start by reviewing what’s happened in the last year.

Gov. Tim Walz vetoed the rideshare bill in late May of last year, to keep Uber and Lyft service in Minnesota. He established a task force to study the issue, including new ways to protect drivers.

But just before the task force’s report was released, the Minneapolis City Council passed a rideshare ordinance that caused Uber and Lyft to say they would leave the metro area and Minneapolis respectively. Because Minneapolis couldn’t do much else, the dispute was limited to rates.

However, rooted in the task force’s report, the legislation now moving forward goes far beyond rates: It features expensive insurance requirements, which can’t be passed along to drivers. Several other requirements also significantly increase costs for Uber and Lyft. Customers will pay for everything.

At a legislative hearing early last week, a representative for Lyft said they estimate the new insurance mandate alone could increase fares by 22%, and both companies said they would leave not just Minneapolis but Minnesota if the current legislative proposal is enacted. The insurance mandate would become effective Jan. 1, 2025 — the higher cost would be delayed until then.

Uber offered Seattle as a cautionary example, saying changes similar to those proposed for Minnesota had sent ridership down more than 50% from the pre-pandemic level — and noting the average Seattle family income was $103,000, compared with Minnesota’s $56,000.

Clearly both Uber and Lyft anticipate drastically lower trip volume. They’re not bluffing. If the current bill passes, this is why they will leave.

As of this writing, the House had appeared set to pass a bill. The only possible good outcome appears to be another veto from Walz.

Uber and Lyft could then acknowledge the problem is limited to Minneapolis and agree to delay their leave-by date to let the Legislature fix the overall situation next year. Meanwhile they can add a Minneapolis surcharge for all rides in or out — to be canceled when the City Council ordinance is preempted.

The state bill addresses legitimate issues. But we must understand that no one has some kind of a right to be a rideshare driver. If driving isn’t working for a family economically, we should concentrate instead on helping them find different employment.

Here are some new ideas to consider going forward:

• Allow drivers to permanently renounce rideshare once and qualify for 12 weeks of unemployment; make that a bonus if they drive a bus for a year. We could also find ways to help them get rid of a fancy car they bought or leased long-term.

• Reduce risk to drivers by drastically increasing criminal penalties when a driver is injured or threatened.

• Provide some rideshare vehicles with a thick, bullet-resistant plastic shell surrounding and protecting the driver. Let able-bodied customers load and unload everything.

• Find new ways to merge rideshare drivers with transit. Using 15-passenger vans can supplement service frequency on existing major bus routes — but only for registered rideshare riders. This will lead to a higher standard of behavior for everyone.

• Include the state bill’s benefits as part of the state budget — but only for rideshare drivers who agree to integrate with our transit service. Otherwise, let companies and drivers share the cost.

• Plan for automated driving solutions whenever and wherever possible.

• Set minimum rates Uber and Lyft will accept.

With these changes rate hikes could be zero — or at worst way less than what Uber and Lyft now expect. We must minimize or avoid higher rideshare rates.

To sum up: The City Council blew it, and the bill moving through the Legislature makes things far worse. Uber and Lyft will not only leave — it could be impossible to ever get them back.

Last year the first Walz veto ever bought a year to try for a comprehensive fix. As we’ve seen that effort has failed. But another Walz veto can buy us another year. We need to take all of what’s happened this year as a learning experience and come up with something that will work by next May.

We can do this.

Bob “Again” Carney Jr., of Minneapolis, is a transit activist.