Twin Cities tourism business braces for impact of Uber departure

Visitors who pour by the thousands into Minneapolis-St. Paul International Airport have long been able to take for granted that fleets of rideshare drivers will be ready to pick them up at the flick of a smartphone and ferry them around the Twin Cities.

In a month’s time, that option could disappear. It’s got local tourism industry leaders more than a little nervous.

“It’s just crazy to think about,” said Angie Whitcomb, CEO of Hospitality Minnesota, a nonprofit group that represents restaurants, lodging and resorts throughout the state.

Minneapolis hospitality and tourism agencies are anxiously contemplating a future without rideshare services, even as they remain hopeful for a resolution to the dispute between the Minneapolis City Council and two rideshare giants over driver pay that has Uber and Lyft vowing a May 1 departure from Minneapolis.

That would leave a big hole in the local transportation system and inflict even more harm on an already struggling hospitality industry, especially hotels, said Adam Duininck, president and CEO of the Downtown Council and Downtown Improvement District.

“We need to build up businesses and not lose more businesses,” he said. “We need to look for more ways to move people around downtown, not less.”

In 2023, there were nearly 1.9 million stays at Minneapolis hotels, an increase of 15% over the year prior, according to Meet Minneapolis. This year is off to a busy start for travel, with 49,190 people passing through Transportation Security Administration checkpoints on March 21 — the second-busiest day at MSP since the start of the pandemic. The busiest day in that period was during MEA week last fall.

The hospitality industry itself is supported by many workers who rely on rideshare access to get to and from work after late shifts. “Our businesses operate on extended hours and at 2 in the morning you can’t be guaranteed there’s going to be public transportation at the front door of your place of business to get you safely home,“ Whitcomb said.

Many of Lyft’s top pickup and drop-off locations are hospitality and tourism locations like Hilton Minneapolis, the Minneapolis Convention Center, Hyatt Regency-Minneapolis, and the Hewing Hotel, according to data shared by the rideshare company. While Lyft says it intends to depart only the Minneapolis market, Uber says it will pull out of the Twin Cities entirely.

Duininck decried the Minneapolis City Council’s decision without a plan in place if Uber and Lyft follow through on the promises to leave.

“That is like if the airport shut down Delta and said we can find you rides on American or Spirit,” he said. “It’s irresponsible and it will affect our city, events and tourism.”

Large-scale events rely on ridesharing options for attendees. Ensuring seamless transportation is essential to enhance participants’ overall experience and make Minnesota a premier travel destination, Lauren Bennett McGinty, executive director of Explore Minnesota, said in a statement.

“Ensuring a diverse range of transportation choices is paramount for Minnesota to remain competitive, particularly in major metropolitan areas like Minneapolis,” she said.

A lack of options could potentially jeopardize the millions of dollars the state has invested in the revitalization of downtown Minneapolis post-pandemic and post-George Floyd’s murder, just as some momentum is building toward recovery, Whitcomb said.

“We’re finally having meeting planners from across the country really look at Minneapolis for their events and conventions, but they’re looking at the cost from a holistic perspective,” Whitcomb said. “And if rideshare’s going to be hard to get, or it’s going to be the most expensive in the country … that’s going to impact their decision to come here.”

Still, industry leaders are holding out hope for fair wages and assurances that travelers and industry workers will have transportation options that meet their needs.

“We are hopeful that a solution can be found so that any impact to rideshare users — including out-of-town visitors, convention attendees and tourism and hospitality workers — is negligible,” Kathy McCarthy, a Meet Minneapolis spokesperson, said in a statement.

The hospitality industry will never be on the wrong side of wanting people to have the ability to make a living wage and take care of their families, Whitcomb said: “It’s just unfathomable to imagine that we’re solving a problem we think we’re solving and OK with causing so many other problems.”

Whitcomb and Duininck said they are hopeful the Legislature and Gov. Tim Walz can solve the dilemma and keep Uber and Lyft running. Duininck said it’s a truly open question how people, and especially visitors with little knowledge of local routes and regions, will get around efficiently.

“We need to solve this issue,” Duininck said. “It is not good for our city.”