The new minimum wage law that Minneapolis recently passed prompted the imminent departure of Lyft and Uber from the city. It all started on Thursday during a city council meeting. During the meeting, held at City Hall, council members voted 10-3 for regulations overriding the mayor's veto that allowed these companies not to pay rideshare drivers the minimum wage of $15.57 an hour.
That means that, starting May 1, both Lyft and Uber will be required to pay a minimum of $15 an hour to their drivers. Both companies saw the increase as disproportionate, which is why they both made the decision to stop operating in the metropolis as of that date.
Lyft was the first to speak out. In a statement obtained by the AP, the ride-sharing company said that the municipal bill was "deeply flawed" and that the municipal ordinance made "operations unsustainable." However, the company assured, they were in favor of its drivers having a minimum wage, but not the figure approved by the council:
We support a minimum earning standard for drivers, but it should be done in an honest way that keeps the service affordable for riders. This ordinance makes our operations unsustainable, and as a result, we are shutting down operations in Minneapolis when the law takes effect on May 1.
10,000 people out of work
Uber's reaction was similar. In a statement obtained by CNN, the world's largest ride-sharing company said it was also against the new measure, as it would leave many people out of work:
We are 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.
Minneapolis Mayor Jacob Frey was also against the new law. According to the Democrat, it is necessary to provide a minimum wage for rideshare drivers, however, he does not believe that the municipal ordinance is appropriate to legislate it, since it did not take into account a study carried out by the state of Minnesota assessing what the salary that the drivers should receive should be:
Everyone wants to see Uber and Lyft drivers get paid more. But getting a raise doesn’t do a whole lot of good if you lose your job. There will be a massive impact felt by our region.
