The Minneapolis City Council ruled in a 10-3 vote on March 14 to override the mayor’s veto of a bill that would increase the minimum wage of Uber and Lyft drivers, who were not included in the recent citywide $15 minimum wage ordinance. The measure requires that drivers receive $1.40 a mile and 51 cents a minute for the entire duration of a ride occurring in Minneapolis. This is compared to a rate of 89 cents per mile and 49 cents per minute to reach the state-wide minimum wage. The bill also ensures annual increases based on the city’s minimum wage. 

Uber released a statement criticizing the decision: “We’re disappointed the council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded.” Lyft criticized the mandate as well, calling it “deeply flawed,” stating that the Lyft team supports a state-mandated minimum wage for drivers but not the one passed by the Minneapolis city council. Drivers will no longer be able to start rides that begin or end in Minneapolis.

The city council has reiterated that this was not an easy decision to make, with councilman Michael Rainville voting against the ordinance. “I do believe in living wages very, very strongly. It’s put me in the position I’m in. But this is an issue where we need help from the state of Minnesota to figure this out,” said Rainville in an MPR interview, “because the airport is not in the city of Minneapolis, so many of these rides are not contingent on the city of Minneapolis.” 

Minneapolis City Council Member Andrea Jenkins voted in favor of the ordinance but has since introduced a notice to reconsider, which was voted on April 11th. City officials decided to push back the start date of the ordinance from May 1 to July 1, which buys both Uber and Lyft some time to convince them to reverse the decision. In response to the notice, Mayor Jacob Frey issued a statement: “There has been and still is room for compromise to ensure drivers who rely on rideshare services for a paycheck get a raise and riders who rely on the service can continue getting around our city.”

Senior Salma Ali notes that she sometimes uses Uber to get to venues in Minneapolis when she doesn’t want to worry about parking, and is concerned about the removal of that option. “Going to Minneapolis can be challenging because oftentimes most parents do not feel safe allowing their kid to drive,” said Ali. 

Uber driver Patrick Suah is left to find alternatives after the council’s decision. “I have no other choice. Whether or not [the alternatives] take a long time to set up their procedure. But I don’t know if they’re going to look up drivers that were with Uber and Lyft as a priority. Or do they just want to open up where other people could just fill that void?” 

Suah also foresees a negative impact on Minneapolis’s economy, particularly the tourism in the city, “[Tourists] use Uber because it makes transportation easier for them. But Uber and Lyft leaving will uncover how disruptive this will be. It’s going to hurt the people visiting [the city].”

One alternative that has emerged to replace both Uber and Lyft appears to be the Driver’s Cooperative, or Co-Op ride. The rideshare company has over 10,000 drivers in New York City and is looking to capitalize on a vacancy of ridesharing in the city. CEO of Co-Op Ride, Erik Forman, claims there are around 200 drivers ready to begin operations with the departure of Uber and Lyft. Co-Op Ride can meet the minimum wage requirements called for by the Minneapolis ordinance by taking a percentage of the driver’s fare, reinvesting that percentage back into the company and paying it back to the drivers as dividends.

Governor Tim Walz offered a comment that shows skepticism that a replacement service like Co-Op Ride can fill the void left by Uber and Lyft. “We have what I can only describe as magical thinking that in the next 30 days, somebody’s going to create a new app that folks around the world and country are going to know to use when they come to Minneapolis, and they’re going to figure out how to make the economics work on that,” Walz told WCCO.

Walz is seeking to call the city council back to the table to discuss the issue again and potentially reverse the decision. Walz vetoed a similar bill last year that required drivers to be paid $1.45 per mile and 34 cents per minute. It’s important to note that major cities like Seattle and New York City have passed legislation increasing the minimum payment for drivers, but Uber has stated that demand for rides has gone down in Seattle. 

Regardless of whether the ordinance remains in Minneapolis, it’s clear that the demand for ride-sharing in the city will always be high. It’s just a matter of compromising on a solution that’s beneficial to both drivers and consumers.