The Minneapolis City Council voted Thursday to delay implementation of a wage hike for rideshare drivers from May 1 to July 1, allowing more time for competing transportation network companies to launch their services in light of the threatened departure of Uber and Lyft.
“This is about refining this policy,” said Minneapolis Council President Elliott Payne, addressing the council. “This is not about starting from scratch. … We’ve done a lot of deep work here.”
The decision offers a temporary reprieve for St. Paul and the surrounding region, where business leaders, advocates for the disabled and others have waited anxiously to see how the vote would play out.
Minneapolis council members said only four rideshare companies have submitted applications to get licensed by the city of Minneapolis. Only one company — Wheels, LLC, operating as “MyWeels” — had submitted a complete application to the city of St. Paul as of mid-week, according to a spokesman for the St. Paul Department of Safety and Inspections.
The added time also opens the door to additional changes to the Minneapolis wage ordinance, which is designed to guarantee that rideshare drivers recoup at least the equivalent of the city minimum wage, with benefits, by earning $1.40 per mile, $0.51 per minute while they operate within the city limits.
The new implementation date was approved 13-0 and included in an ordinance amendment proposed by Minneapolis Council Member Katie Cashman, co-sponsored by Payne and Council Member Aurin Chowdhury.
Two additional amendments that would have reduced or rescinded the wage hikes altogether failed on a 10-3 vote, respectively.
Prices temporarily surge
A spirited discussion took up the majority of the two-hour meeting, at times drawing heckles from the audience.
“Uber and Lyft are not just exploiting drivers, but also riders too,” said Minneapolis Council Member Jamal Osman, noting most drivers logged out around 7 a.m. Wednesday to pray during the Muslim holiday. “Uber and Lyft were hiking the price. For a seven-minute trip they were charging customers…$76 or $80. Less than a mile — and I have screen shots — was $70.”
In a letter this week to the Minneapolis City Council and the Minneapolis City Attorney’s office, the Insurance Federation of Minnesota urged the city to ensure that any new transportation network companies seeking licensure either offer the correct insurance or require that their drivers get their own business auto insurance, the appropriate level of coverage for “livery services” that transport goods or people.
Liveries are not included in personal auto coverage.
Uber, Lyft to delay departure
Uber indicated this week it would delay its departure from serving the Twin Cities until the Minneapolis wage hike takes effect.
“If the effective date is moved, we will continue to operate,” said Josh Gold, senior director of policy and communications for Uber, in an interview Tuesday. “We’re having conversations with state lawmakers. We’re open to having conversations with council members.”
CJ Macklin, a senior policy manager with Lyft, forwarded a statement from the company on Thursday indicating they would also continue to operate in Minneapolis until July 1.
Lyft has said it will continue to serve St. Paul and the surrounding region, but it will not honor rides beginning or ending in Minneapolis once wages go up. “The fundamental facts remain the same,” reads the letter. “This ordinance will make rides too expensive for most riders, meaning drivers will ultimately earn less.”
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