MINNEAPOLIS — Rideshare giant Lyft has sent a letter to the Minneapolis city council suggesting a pay rate compromise for its drivers before the city's upcoming rideshare pay ordinance takes effect.
Last month, the council voted to override a mayoral veto on an ordinance requiring rideshare companies to pay rates of $1.40 per mile and 51 cents per minute. Both Lyft and Uber have announced plans to end service in Minneapolis when the new ordinance takes effect on May 1; however, some members of the council have said they're willing to reconsider the new pay requirements.
In its letter, Lyft officials said the company "is willing to support the Minnesota Department of Labor and Industry study’s recommended $.89 per mile and $.487 per minute rates." Gov. Walz ordered the study last year after vetoing a similar rideshare pay bill at the state level.
Lyft said the compromise will increase driver pay while allowing its services to remain affordable for riders. Lyft claims the upcoming Minneapolis ordinance would have the opposite of its intended effect, claiming it would lead to a 51% decrease in ride requests, resulting in lost wages for drivers.
"We are asking the City Council to work with us to prevent a disastrous outcome for riders, drivers, and the City of Minneapolis," Lyft Chief Policy Officer Jeremy Bird writes in the letter.
City officials have not yet commented publicly on Lyft's letter; however, any attempt to change or reverse the upcoming ordinance is likely to be met with strong opposition from those who fought for the pay increase.
“Pressure from large corporations like Uber and Lyft can be daunting, and we’ve seen the fear tactics they have used in other cities and states in response to regulation," the ordinance authors wrote in a joint statement late last month.
Read the full Lyft letter below:
Dear President Payne,
We are reaching out to work with the City Council in hopes of preventing the tremendous damage to drivers and riders that Lyft’s departure from the city would bring. Lyft is willing to support the Minnesota Department of Labor and Industry study’s recommended $.89 per mile and $.487 per minute rates, which would allow us to continue operating in Minneapolis. These rates would increase driver pay, a goal which we and the City Council share, and allow rideshare services through Lyft to remain affordable to riders.
We understand that the ordinance was intended to improve driver earnings, an area of serious focus for Lyft as well. That’s why Lyft instituted an earnings commitment where drivers will make at least 70% of the weekly rider fares after external fees. Lyft serves both riders and drivers, meaning that we must balance improving driver earnings with what riders can afford to pay, such that ridership (and therefore driver earnings) do not decrease. Lyft has been consistent in our support for a policy to provide drivers with a minimum earnings standard, as well as our commitment to working with lawmakers and stakeholders on a sustainable solution.
Unfortunately, the rates in the passed ordinance would make the service unaffordable for most riders, which we project will cause a 51% decrease in ride requests. As a result of this loss in ride requests, even with the higher driver pay rates proposed by the ordinance, drivers would ultimately earn 20% less than they do today. In stark contrast, the minimum earnings rate recommended by the Minnesota Department of Labor and Industry would increase current driver earnings by 17% according to their study.
We are encouraged by media reports suggesting the City Council is open to reconsidering this extremely damaging legislation. Lyft is offering a compromise that would truly raise driver pay while saving this vital transportation access and driver earning opportunity. We are asking the City Council to work with us to prevent a disastrous outcome for riders, drivers, and the City of Minneapolis.
Sincerely,
Jeremy Bird
Chief Policy Officer
Lyft
WATCH MORE ON KARE 11+
Download the free KARE 11+ app for Roku, Fire TV, Apple TV and other smart TV platforms to watch more from KARE 11 anytime! The KARE 11+ app includes live streams of all of KARE 11's newscasts. You'll also find on-demand replays of newscasts; the latest from KARE 11 Investigates, Breaking the News and the Land of 10,000 Stories; exclusive programs like Verify and HeartThreads; and Minnesota sports talk from our partners at Locked On Minnesota.
- Add KARE 11+ on Roku here or by searching for KARE 11 in the Roku Channel Store.
- Add KARE 11+ on Fire TV here or by searching for KARE 11 in the Amazon App Store.
- Learn more about the KARE 11+ app for Apple TV in the Apple App Store.
- Learn more about KARE 11+ here.