If driver pay ordinance passes, Uber and Lyft say they may stop operating in Minneapolis

Ride-share companies Uber and Lyft said they would likely cut back or cease operations in Minneapolis if the city enacts an ordinance governing driver pay.

On Tuesday, both companies sent blast emails to customers asking them to contact council members and urge them to vote down the measure. If approved, it would make Minneapolis Uber and Lyft drivers some of the highest paid in the United States.

The council's Business, Inspections, Housing and Zoning Committee passed the ordinance last week and sent it to the full council to take up at its Thursday meeting.

"If this bill were to pass, we would unfortunately have no choice but to greatly reduce service, and possibly shut down operations entirely," Uber said in its email.

Lyft executives, in a letter sent to Council President Andrea Jenkins, said that if the proposal becomes law the company "would be forced to cease operations" in Minneapolis Jan. 1, the date the ordinance would take effect.

The measure calls for drivers to be paid $1.40 a mile plus 51 cents a minute while a passenger is in the vehicle on trips within Minneapolis' borders. Drivers also would get a minimum of $5 a trip and be guaranteed 80% of fees collected when trips are canceled.

If the ordinance is enacted, a Lyft ride that costs $20 today could double to almost $40, "turning ride-share into a luxury service," Lyft chief policy officer Jeremy Bird wrote in the letter, which also copied in Mayor Jacob Frey. "It would make rider fares too high and significantly undercut driver earnings by reducing ride volume. The math simply doesn't make sense, and it would force us to shut down operations in the city."

The ordinance would also require companies to notify a driver in writing five days before deactivating their account or imposing a sanction, even if the driver is reported for a serious safety issue. The driver would then have 15 days to request a deactivation reconsideration meeting with the company.

"A traffic ticket or other traffic or criminal charge alone is not conclusive of a rule violation unless there has been a conviction," the ordinance states. Drivers who were deactivated since Jan. 1, 2021 would have the right to request a meeting and be reinstated.

In its email to riders, Uber said that change would "greatly limit our ability to remove unsafe drivers from the platform, including drivers accused of sexual assault, harassment, impaired driving or discrimination."

Gov. Tim Walz this spring vetoed similar legislation that would have set ride-share driver pay rates statewide, and set up a task force to make recommendations to address wages, driver and rider safety and rules for terminating drivers or deactivating their accounts.

The task force is set to report back when lawmakers return to the Capitol in 2024.

Minneapolis council members and staff worked for months on the city's "Fair Rides, Safe Drives" initiative, which led to the ordinance. Several drivers who are members of the Minnesota Uber/Lyft Drivers Association (MULDA) spoke in favor of the measure at last week's committee meeting. Many said they don't know how much they will be paid for each ride and are making less than they did 10 years ago.

An attorney for MULDA said drivers in Minneapolis currently earn less than 60 cents per mile and 19 cents per minute. One driver told the committee that a rider paid $60 for a trip to the airport, but he was paid only $18.

"We are not making it," driver Marianna Brown said last week before the committee meeting.

As Lyft and Uber ramped up lobbying efforts Tuesday, Council Member Robin Wonsley pledged to get the ordinance passed.

"These are the standard scare tactics that corporations use to resist regulation," said Wonsley, one of the measure's chief authors. "Fair Drives, Safe Rides simply helps guarantee that drivers earn minimum wage equivalents and have basic workers' rights. The ordinance would only be problematic for a company that relies on poverty wages and worker exploitation."