MINNEAPOLIS — The Minneapolis City Council voted to approve a new rideshare ordinance Thursday, dealing a blow to companies like Lyft and Uber that threatened to leave the city should the law pass.
In a vote Thursday morning, the council pushed the ordinance through by a vote of 7-5. Now the order will land on the desk of Mayor Jacob Frey, who argued in a letter to the council on Wednesday night that more time for deliberation on the statute is still needed.
"From the feedback we gathered, it is clear that we must allow more time for deliberation. We need both additional data and conversations to be had to ensure the essential safety and well-being of rideshare drivers and riders alike," Frey wrote in his letter.
Following Thursday's vote, it still wasn't clear whether Frey would sign or veto the measure. In a statement after the vote, his spokesperson said: “As the mayor laid out in his letter to the City Council yesterday, he supports drivers being paid more. However, he has deep concerns with how the ordinance is written and the impact it will have. He needs time to review the ordinance and the amendments made to it.”
In an interview with KARE 11, the mayor expanded on those thoughts.
"We support making sure these drivers get paid more money. They've earned it. At the same time, we've got to be doing some smart and good governance. Need to make sure the policies that we're passing are smart and thoughtful, and worked out ahead of time," Frey said. "We're going to be reviewing the policy first, figuring out what works and what doesn't, and we'll make a decision from there."
As for whether he thought Uber and Lyft were bluffing on threats to leave Minneapolis, Frey said "I talked to them directly. I don't want to speak for the ridesharing companies."
Frey has until Wednesday to decide whether to approve the ordinance or issue a veto. The council could override a veto with nine votes.
In its own letter addressed to City Council President Andrea Jenkins, San Fransisco-based Lyft said it would "be forced to stop operating in Minneapolis" on Jan. 1 should the rideshare ordinance pass through the council and the mayor. The company went on to say that it believed raising driver wages would also increase costs for riders, resulting in fewer ride requests and fewer earning opportunities for drivers. In its notice to riders through its app, Lyft wrote costs would "nearly double."
After the vote, a Lyft spokesperson doubled down on the company's stance, telling KARE 11 in a statement:
"This bill has been jammed through the Council in less than a month with little consideration for its consequences. If it becomes law, drivers would ultimately earn less because prices could double and only the most wealthy could still afford a ride. We support a minimum earning standard for drivers, but it should be part of a broader statewide solution that also protects driver independence. That's why we urge Mayor Frey to veto this bill and instead allow time for the state's rideshare task force to complete its research."
The ordinance calls for rideshare drivers to earn at least $1.40 per mile and $0.51 per minute, or $5, whichever is greater. The rule would only apply to the portion of the ride within the city.
It would also guarantee that riders and drivers get receipts within 24 hours of a completed trip with details outlining how much the rider paid versus what the driver received.
Two amendments to the ordinance were also approved by the council and included. The first, introduced by Jenkins, mandates an increase in per-mile compensation for drivers in wheelchair-accessible vehicles while they're carrying riders. The second, introduced by Wonsley, Chavez and Ward 6 Council Member Jamal Osman, says that in the event of alleged misconduct involving rider safety or public safety (ie, driving while intoxicated, harassment, sexual harassment, violence, etc), the company may immediately deactivate the driver without five days’ notice.
While city officials and Lyft wrestled back and forth, some drivers and local groups directly impacted by the proposal also continued to make their respective cases at City Hall.
Supporting the bill, the Minnesota Uber/Lyft Driver's Association stood in solidarity alongside Ward 2 Council Member Robin Wonsley, one of the statute's co-authors.
Ward 9 Council Member Jason Chavez, also a co-author of the proposed rule, said at Thursday's vote that he couldn't "ignore the workers that are struggling to get by."
"This is backed by data and research, despite what corporate lobbyists are trying to say, that isn't working over here," he said. "In a city like Minneapolis, we should expect more than minimum wage and that's what this policy does."
Others, like the Minnesota Rideshare Drivers Association, called the proposal a waste of time because it too closely resembled the rideshare statute that Gov. Tim Walz vetoed earlier this year.
Minneapolis Ward 4 Council Member LaTrisha Vetaw, also placing focus on the drivers, voted for Ward 12 Council Member Andrew Johnson's motion Thursday to send the proposal back to committee for further review. That motion was ultimately voted down.
"I work with people on both sides. There is another voice in this, there are drivers who think differently," she said. "I have to make time for them also. I've had a ton of drivers who've reached out to me in my ward who don't agree with this decision."
While the handwriting seems to be on the wall for Lyft, Uber also shared a similar warning to riders: If the plan passes, it would "greatly reduce services" and "possibly shut down operations entirely."
After the vote, a spokesperson from the company said in a statement Friday:
“We are disappointed by the results of yesterday’s vote and the overall process in Minneapolis. We supported a compromise earlier this year that would guarantee higher pay, more transparency and increased insurance coverage. Unfortunately, the Council instead passed a bill that will hurt riders and drivers, and did so without any discussion with the industry and other stakeholders.
As a result of the incredibly expensive rates set forth in the bill, if it becomes law, beginning December 31, we will no longer offer UberX in Minneapolis. We will only offer premium products, such as Uber Black and Uber SUV, to match the premium prices required by the ordinance.”
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