Uber and Lyft to Exit City Due to New Wage Law

(DailyVantage.com) – Uber and Lyft are pulling out of Minneapolis, Minnesota, due to a new wage law that would force both ridesharing services to pay their drivers higher amounts.

The Minneapolis City Council enacted the new wage requirement, forcing rideshare providers to pay approximately $1.40 for each mile driven, $0.51 for each minute driven, or $5 per ride provided, whichever is the greater total. The new wage law isn’t limited to ridesharing services but applies to every non-public transportation provider within Minneapolis’ city limits.

The Minneapolis City Council passed the new wage law to compel rideshare services to pay drivers an amount comparable to the city’s minimum wage, $15.57 for each hour worked. One of the city council members who helped author the new wage requirement addressed the latest policy and explained the reasoning behind the city enacting the controversial wage ordinance. According to Minneapolis City Councilman Jamal Osman, the council authorized the new measure partly due to how many minorities drive for ridesharing services like Uber and Lyft and how they also frequently work as taxi drivers within city limits.

Osman claims that among the drivers for Uber and Lyft is a large number of African immigrants who aren’t compensated fairly for their work. Osman said that the Minneapolis City Council wants to provide rideshare drivers the opportunity to pay for necessities and live through an affordable wage, such as the city’s already established minimum wage. Osman also said that the new wage requirement would prevent rideshare apps from participating in exploitation by requiring them to pay a fair wage to their drivers.

Despite Osman’s claims, Uber and Lyft are prepared to withdraw from Minneapolis due to the city-imposed increase in company expenses. A spokesperson from Uber confirmed the impending withdrawal, claiming that Uber would cease operations in Minneapolis once the new ordinance becomes active in May. Uber and Lyft’s decision to leave Minneapolis is the latest instance of rideshare services pulling out of a city, with the last incident occurring in Texas.

In Austin, Texas, city lawmakers attempted to pass an ordinance requiring rideshare drivers to provide fingerprints for background checks, prompting Lyft and Uber to prepare to cease operations in the city. Texas’s lawmakers quickly responded to the potential end of Uber and Lyft’s services within Austin and prevented the background check reform from passing into law. Minneapolis residents will likely lose access to Uber and Lyft in the coming weeks without a similar intervention from Minnesota’s lawmakers.

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