After a dozen years in the Twin Cities, Uber and Lyft have announced they’ll roll their ride-hailing services out of Minneapolis on May 1 after the Minneapolis City Council voted to mandate the equivalent of wage increases for drivers.
What does that mean for St. Paul and the rest of the Twin Cities metro?
Some have called threats of their departure mere saber-rattling, but Uber on Friday indicated it would exit the surrounding cities and counties, as well as Minneapolis-St. Paul International Airport.
“This ordinance will impact the entire Minneapolis metropolitan area, including St. Paul, the surrounding suburbs and the airport,” said Hayley Prim, a senior policy manager for Uber, in an email Friday. “The ordinance is drafted so as to impact any trip that crosses over Minneapolis city limits, which means we will be forced to leave the areas surrounding the city as well.”
Implications
The implications go beyond having to hail a taxi instead of dialing up an Uber on date night.
For some, the two companies have become essential providers. With funding from a Minnesota Department of Human Services grant, Dakota County Social Services partners with Lyft to transport clients of its case management services to and from employment, including wheelchair users and others with special needs.
A message to Lyft seeking comment was not immediately returned on Friday.
And cabs can be difficult to come by. Backed by venture capital, the two ride-hailing companies were able to undersell the market when they rolled into the Twin Cities in 2012. They offered lower rates than traditional cabbies, which are now in short supply in Minneapolis and St. Paul compared to a decade prior.
Still, ride-hailing reservation costs have since gone up. Cab companies are still around, but scaling up to fill the void if the ridesharing companies pull the plug could take time.
“I don’t think they’re leaving,” said Jay Jamal, production manager with Gold and Green Taxi Cab, which maintains some 30-35 drivers in Eagan and Minneapolis. “They’re making more money here than in other states in the Midwest except Chicago. It’s fake news. But we’ve gotten more customers in the past six months because their reservation fees are higher than people expected.”
Turned off by low wages and other company policies, some drivers have quit Uber and Lyft and returned to traditional cab companies, which have relied on online platforms like Curb — gocurb.com — to stay competitive, as well as contracts with school districts and social service providers.
Three scenarios — and precedents
Business advocates are not taking threats of the two companies’ departures lightly and have called for state lawmakers to intervene.
“This means the end of Lyft and Uber not just in Minneapolis, but potentially across all of Minnesota,” said Jonathan Weinhagen, president and chief executive officer of the Minneapolis Chamber of Commerce, in a social media post following Thursday’s vote of the Minneapolis City Council. “It’s time for the governor and Minnesota legislature to step in and keep this important transportation option available across our entire state.”
Some city residents were instantly incredulous.
“Does it though? Want to bet lunch that you’ll be able to take an Uber in Minneapolis in May?” responded logistics consultant Mike Norton, who has been active in Minneapolis politics.
Both scenarios — that the nation’s major ride-sharing companies will stay or leave — have national precedent. A third option would entail remaining in the Twin Cities while somehow avoiding Minneapolis, which might sound improbable on the face of it. Still, even a temporary boycott of the city — or cities — stretching through a major convention or sporting event could chill voters.
The app-based ride-hailing platforms still operate in Seattle and New York, which both raised wages for drivers, but those are busier markets than the Twin Cities. The companies called it quits in Austin, Texas in 2016 after voters approved new regulations for their services, but they then returned the following year after Texas Gov. Greg Abbott signed into law statewide measures that overrode those local ordinances.
‘Nothing to fill that gap’
A spokesman for St. Paul Mayor Melvin Carter on Thursday evening said the mayor had spent the day with Vice President Kamala Harris and would have no immediate comment. St. Paul City Council President Mitra Jalali also said she was still evaluating details and would have no immediate comment.
May isn’t the busiest time for sporting events, though the Minnesota Twins, St. Paul Saints and Minnesota United are all scheduled to host home games that month.
Truer tests of life without ride-sharing could come when Janet Jackson plays the Xcel Energy Center on June 18 and the Breakaway Music Festival rolls into St. Paul’s Allianz Field for two days later that month. The inaugural Minnesota Yacht Club Musical Festival lands on Harriet Island for two days in July and the Basilica Block Club Party comes to Boom Island in Minneapolis for two days in August.
Democratic Gov. Tim Walz, who issued his first-ever veto last year of a bill that would have boosted pay for Uber and Lyft drivers, told the Associated Press this week that their departure would have have negative impacts on the disabled and others who rely regularly on their services, “and there’s nothing to fill that gap.”
He said he hoped the Legislature would seek a compromise that includes fair pay for drivers and dissuades the companies from leaving.
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