Uber, Lyft to Exit Minneapolis After Minimum Wage Vote

Uber and Lyft will reportedly halt their operations in Minneapolis after the city council voted to require that drivers be paid a minimum wage of $15.57 per hour.

The rideshare companies said they will stop operating there on May 1, Reuters reported Friday (March 15).

Uber said it was “disappointed” in the city council’s decision and said the move will put 10,000 people out of work. Lyft said the law passed by the council is “deeply flawed,” according to the report.

Online platforms may be shaken by wage hikes and new regulations impacting the ways in which gig workers are classified, PYMNTS reported in January.

The companies faced a strike in 10 cities on Valentine’s Day (Feb. 14), with Justice for App Workers saying: “Uber, Lyft and delivery drivers are tired of being mistreated by the app companies.”

Drivers participating in the strike said that they were demanding fair pay and better working conditions, that the platforms take disproportionately high commissions, and that drivers are left with inadequate earnings to cover their basic expenses.

Also in February, Lyft said that it made several improvements for drivers in a product update, addressing concerns about earnings, deactivations and safety.

On the earnings front, the company introduced a new pay standard for drivers, aiming to ensure that drivers earn 70% or more of rider payments each week, after external fees. If a driver falls below the 70% threshold, Lyft will pay them the difference, guaranteeing a minimum earning.

In November, New York State Attorney General Letitia James said Uber and Lyft would pay a combined settlement of $328 million after a multi-year investigation into their practices found that the companies withheld pay from drivers, deducting sales taxes and fees that should have been paid by riders, and prevented drivers from receiving benefits like sick leave that are available under the state’s labor laws.

Uber said at the time that the settlement in New York would provide platform workers with both flexibility and benefits. Similarly, Lyft said the agreement would grant drivers new benefits while also allowing them to keep their flexibility and independence.