Proposed ordinance raising rideshare driver pay back before Minneapolis committee Tuesday

Rideshare companies Lyft and Uber once again say they will stop operating in Minneapolis if a proposed ordinance governing driver pay is enacted.

An ordinance that would pay drivers a minimum of $1.40 per mile and 51 cents per minute while transporting riders on any trip within the borders of Minneapolis will be discussed during the City Council’s Business, Inspections, Housing and Zoning Committee meeting at 1:30 p.m. Tuesday.

The legislation also calls for drivers to be paid a minimum of $5 per trip and be guaranteed 80% of fees collected when trips are canceled.

Driver pay in Minneapolis has been heavily debated topic over the past year. Minneapolis Mayor Jacob Frey in August vetoed an ordinance that would set minimum pay standards for drivers.

Gov. Tim Walz also vetoed legislation would have set rideshare driver pay rates statewide, and set up a task force to make recommendations to address wages, driver and rider safety and rules for terminating drivers or deactivating their accounts. The task force completed its work but did not make recommendations.

Lyft in January announced a $5 minimum charge for all rides within the Twin Cities metro area, and this month committed to ensuring drivers make at least 70% of weekly rider fares after fees are taken out. Uber already had instituted the $5 minimum charge.

“This is how we can improve driver earnings in a smart and deliberate way,” a statement from Lyft said.

Lyft said the Minneapolis proposal would make rides too expensive for many people, and would force the company to cease operations in the city, and possibly the rest of the state.

Uber has previously said it would greatly reduce service and possibly shut down in Minneapolis if the ordinance passes.

The Minneapolis Downtown Council also is urging City Council members to reject the measure, saying it would have an adverse impact on low-income riders and turn rideshare into a benefit for the wealthy.

The Downtown Council also says the ordinance does not take into account the regional impact it would have on downtown, the airport, events, and nightlife and entertainment, which is starting to come back after recent down years.

“The economic recovery of Minneapolis is not assured, and we cannot afford to give people reasons to avoid destinations in the city,” Adam Duininck, president and CEO of the Minneapolis Downtown Council and the Downtown Improvement District, wrote in a letter to the Minneapolis City Council on Monday. “We must not make Minneapolis an island for rideshare drivers or customers.”

In his letter, Duininck urges the City Council to work with state lawmakers to set statewide pay minimums.

Lyft drivers in Minneapolis saw $34.40 in gross earnings per hour with tips and bonuses factored in during the second half of 2023. That translated into a net average of $25.94 per hour after fees and expenses such as gas and vehicle maintenance is factored in, both of which are higher than the national average, Lyft said.