MINNEAPOLIS — Sometimes the best way to get to around the Twin Cities is to take Uber or Lyft.
But the ride share companies doubled down this week, saying they'll leave the entire state if they have to significantly raise driver pay.
Don't believe it? They've done it before.
The two companies pulled out of Austin, Texas in 2016 over safety regulations and some people familiar with the change say the impacts were nothing short of devastating.
"They’ve got a pretty clear track record of putting their money where their mouth is," said Brian Thornton. He was a former policy advisor for then Austin City Councilor turned Texas House Member Representative Ellen Troxclair.
He worked with certain stakeholders to try and strike a deal with Uber and Lyft that left, in particular, over an ordinance requiring drivers to be fingerprinted to protect riders. It only took two days for the companies to be non-existent in Austin.
"It’s a pretty tough prospect to not have them and so, as much as state and local regulators are interested in certain outcomes, the fact is, when you lose companies like this, it’s very devastating," said Thornton.
In Minnesota, data shows drivers give more than a million rides every month across the Twin Cities.
The two companies are threatening to leave come July after the legislature just introduced a minimum wage bill for drivers. It's trying to find a compromise after the Minneapolis City Council already approved an ordinance to pay drivers $1.40 - $0.13 cents more than the state's proposal.
Uber and Lyft maintain both wages will lead to fares too expensive for riders and the business unsustainable.
"They see it as if they cave to a regulation here, in this location, then it will pop up over there, and if they accept that on a national level, then the model doesn’t work," said Thornton.
He said several new rideshare apps followed after Uber and Lyft's exit, but they were so unreliable that it was impossible to get rides. That then led to a black market.
"We had people taking random rides from Craigslist or people would pull up to bars and offer rides," said Thornton. "It had an unintended consequence that was the exact opposite of what our state and public policy goal was."
Uber and Lyft have also, at one point, left cities in California and New York. They both returned to Austin a year later, but only after the legislature overturned certain regulations and enacted new ones for rideshare companies. Thornton says the transition was immediate and seamless.
As for Minnesota, the drivers bill continues to make its way through committees. But its future is uncertain as there are only five days left of the legislative session.
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