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Minneapolis City Council passes new rideshare ordinance, despite Lyft, Uber threats to pull out

Minneapolis City Council passed pay boost for rideshare workers. What now?
Minneapolis City Council passed pay boost for rideshare workers. What now? 02:16

MINNEAPOLIS — Members of the Minneapolis City Council have passed an ordinance on Thursday guaranteeing minimum pay for rideshare drivers. The vote passed by a 9-4 vote, despite some concerns from council members over the fact that a state task force would be releasing their report on rideshare economics the very next day.

Uber and Lyft have threatened to pull their services from the city if it passes, and both Mayor Jacob Frey and Gov. Tim Walz vetoed similar proposals both for the city of Minneapolis and statewide last summer.

Frey has once again said he'll veto the ordinance, but the City Council's vote Thursday suggests they'd have enough votes to override Frey's veto should he do so. 

App Based Drivers California
Richard Vogel / AP

The ordinance guarantees drivers get 80% of canceled rides and earn no less than $5 per ride.

In a statement, several of the council members called the passing of the ordinance "a win for workers, by workers." They say the move will close a loophole in the city's minimum wage law. 

"Small businesses are required to pay minimum wage before tips, and it's clear that multi-billion dollar out-of-state tech companies should be too," Council Member Jason Chavez, Ward 9, said. "No company should be above the law. Relying on low-income riders to subsidize Uber and Lyft paying drivers' wages is an economic and racial injustice."

Lyft urged its drivers and users earlier this week to sign a petition opposing an ordinance, saying the new proposal would nearly double prices for rides in the city. 

Lyft, Uber vow to end service in city on May 1 if it becomes law

If the ordinance becomes law, both Lyft and Uber say they'll pull services from the city on May 1, which is the new implementation date following an amendment by the council. 

"The Council hijacked a State process that proposed real solutions and is in the process of analyzing data to inform a workable earnings standard," Uber said in a statement. "The State's taskforce made a series of recommendations that should be legislated and collected real data to come up with an appropriate minimum earnings standard."

Lyft said it supports a minimum earnings standard for drivers. 

"But it must be done in a way that allows the service to sustainably and affordably operate for riders," Lyft said in a statement. "For the second time in less than a year, the bill-sponsors have willfully chosen to ignore offers to collaborate, instead choosing to rush through the most extreme figures possible. We implore Mayor Frey to veto this legislation and instead join our efforts to pass a statewide minimum earnings standard that can balance the needs of all. Otherwise, we will no longer be able to operate in the city once the bill takes effect on May 1."

Frey calls vote "irresponsible"

Soon after the City Council's vote, Frey's office confirmed he will issue a veto before the end of the day Friday. 

"The statewide report is literally going to be released tomorrow. It's irresponsible to pass policy today when we'll have the data tomorrow," he said in a statement. 

The mayor has said in the past that the council needs to work with the companies to come to an agreement.

"Talk with them, see what they're willing to do. You might find a win-win situation where you're able to keep this important service and give ... drivers the raise that they need," Frey said.

Walz established a committee last summer to study ridesharing in the state. That data is expected Friday. 

New York, Washington State and California all have laws establishing minimum pay for rideshare drivers. Both Lyft and Uber still operate in those states.

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