Current Events > Minneapolis mayor veto overridden, Uber and Lyft say they are leaving

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https://m.startribune.com/minneapolis-city-council-overrides-frey-veto-on-uberlyft-plan/600351100/

Rideshare giants Uber and Lyft say they will leave Minneapolis May 1 after the City Council voted to enact a pay raise for drivers.

The council voted 10-3 on Thursday to override Mayor Jacob Frey's veto of the ordinance, which sets minimum pay drivers receive for rides in the city, starting May 1.

In statements soon after the vote, Uber said said it will "stop operating a transportation network in the entire metro area including the airport," and Lyft said it will be "shutting down operations in Minneapolis."

The vote was met with cheers from an organized group of drivers, and council members who support the plan declared it a victory for workers and scoffed at the ride-hailing companies' threats.

Meanwhile, a forlorn Frey said, "We've got a lot of work to do" to prepare for an Uberless reality.

Frey had pleaded with council members to lower the pay minimums to a level that would significantly boost driver pay, but still be amenable to the ride-hailing companies.

Thursday's vote means the ordinance will go into effect as-is, although the council could decide to change it before May.

The council approved the plan last week with a veto-proof majority. Frey vetoed it the next day and called Thursday's special meeting to get the override vote taken care of quickly. If he were to be overridden, he argued, it was best for that to happen as soon as possible to give the city time to prepare.

Uber and Lyft are the only licensed rideshare companies in the city, although several entities both local startup notions and existing companies have said they'd be eager to fill the void. None have formally applied for a license.

For several years, an organized group of drivers have complained that Uber and Lyft have cut the share of fares they receive, to the point where some say they can't make ends meet. Many were cab drivers before Uber entered the market a decade ago, leading to a massive shrinkage of the local taxi sector. The companies only recently started reporting profits, and critics have said their business model is dependent on exploiting drivers.

These organized drivers found allies among the more liberal members of the City Counciland state Legislature. New minimum standards were approved last year in Minneapolis and at the state Capitol, but Frey and Gov. Tim Walz vetoed them. In Minneapolis, the political make-up of the council changed in November's election.

Supporters on the council said their goal was for drivers to earn the equivalent of the city's $15.57 hourly minimum wage. However, a state-commissioned study, released a day after their vote, concluded that drivers could be paid far less than the Minneapolis plan to earn the minimum wage equivalent even with benefits like health insurance and paid time off.

Here are some numbers:

The Department of Labor and Industry study billed as the largest rideshare driver compensation study ever commissioned suggested that drivers could be paid 89 cents per mile and nearly 49 cents per minute to reach minimum wage equivalency for rides across the metro. A minimum of $1.21 per mile and 49 cents per minute for such rides would afford drivers a suite of benefits, including paid leave, health insurance and retirement savings.

By contrast, the plan approved by the City Council guarantees a floor of $1.40 per mile and 51 cents per minute. The driver of a wheelchair-accessible vehicle would get $1.81 per mile. Frey had pushed for a minimum payment of $1.20 per mile and 35 cents per minute. The approved plan includes additional provisions, including a $5 minimum payment for any ride, annual increases for drivers, and restrictions on how money can be deducted from drivers' wages.

With more than 7,000 active Uber drivers in the state, it's impossible to know where they all stand. There are clearly a range of views.

A vocal coalition of between scores and hundreds of drivers, perhaps thousands, has supported the plan approved by the council. A different group has pushed for compromise, and on Thursday morning that group called for the council to lower their minimums to $1.30 per mile and $0.35 per minute.

More than 300 Lyft drivers signed a company petition last week opposing the council's plan. Some individual drivers have testified publicly or told the Star Tribune that they're fine with the current state of affairs.

Everybody said Uber and Lyft were bluffing.

Block_that_Kick posted...

Meanwhile, a forlorn Frey said, "We've got a lot of work to do" to prepare for an Uberless reality.

Go fuck yourself, Frey.

"The vote was met with cheers from an organized group of drivers"

Why are they cheering being jobless?

https://www.youtube.com/watch?v=i0BTdo6qGwo

Revelation34 posted...

"The vote was met with cheers from an organized group of drivers"

Why are they cheering being jobless?

They only see the $$ signs. They don't see the reality that this will cause.

I do hope the door hits them on the way out

Block_that_Kick posted...

More than 300 Lyft drivers signed a company petition last week opposing the council's plan. Some individual drivers have testified publicly or told the Star Tribune that they're fine with the current state of affairs

The problem is that the drivers doing this full time or that might have been taxi/limo or various driving jobs were not okay with it when Uber and Lyft came in and drove down wages.

Ive driven Uber for nearly nine years. Hopefully theyre bluffing or the city council will come back and negotiate a lower price which will keep them around.

If not Ill have to try to see if I can make money with Lyft sans Minneapolis or hope a new competitor enters the market.

The state can override the ordinance with a law of their own, and if Uber and Lyft are truly leaving, hopefully they can pass one.

s0nicfan posted...

Everybody said Uber and Lyft were bluffing.

They'll be back. Exactly what happened in Texas. They were back within a year.

Fuck Uber and Lyft for leaving because they will make a tiny percent less money

Block_that_Kick posted...

Meanwhile, a forlorn Frey said, "We've got a lot of work to do" to prepare for an Uberless reality.

Oh no, imagine having to have to go back to the horrors of... 10 years ago! Where we all had to walk 10 miles in the snow, uphill, in order to get to work!

The drivers are using their own vehicles so hourly pay should be more than the minimum wage.

After over 13,000 rides with Uber, I just did a Lyft for the first time. Not bad so far.

https://gamefaqs.gamespot.com/a/forum/4/447e6715.jpg

Back to regular old taxis

Let them leave, their horrible companies that operate at a lost in order to disrupt industries and drive down wages and benefits.

Maybe an altruistic rideshare company will fill the void.

/s but not really

Fuck 'em. Other options will take their place.

One of the reasons I'll never rely on rideshares or deliver services. Slightest demand they don't treat people who work for them like trash and they get the fuck out of town.

It's definitely a bluff. There's too much money to leave on the table in these metro areas

Gwynevere posted...

It's definitely a bluff. There's too much money to leave on the table in these metro areas

maybe, maybe not. Low overhead is a big pet of the bottom line

Minneapolis is about to enter the Find Out phase of such stupid policies.

Gwynevere posted...

It's definitely a bluff. There's too much money to leave on the table in these metro areas

Is it? The entire business model of these apps depended on operating at huge losses for the sole purpose of putting the competition out of business

uber didnt even become profitable until 2023

whats another loss for the purpose of keeping people at the bottom down?

__starsnostars posted...

Let them leave, their horrible companies that operate at a lost in order to disrupt industries and drive down wages and benefits.

Someone who clearly wasn't around before ride sharing. The industry they disrupted was far shittier and needed disrupted.

chaos_knight posted...

Minneapolis is about to enter the Find Out phase of such stupid policies.

A lot can happen between now and May 1st.

Uber and Lyft could be bluffing and they stick around afterwards.

The Minneapolis City Council could negotiate with them to pass a wage they would find acceptable. I dont foresee that happening at all.

The state could step in and pass a wage law which would override the city ordinance. I think this is the most likely scenario to happen for a number of reasons.

1. The legislature is currently in session.
2. Legislators on both sides have said they do not want Uber and Lyft leaving.
3. Uber was already actively negotiating with the legislature on passing a rideshare wage bill this year. Then the activists on the city council had to fucking throw a wrench into everything.

Yeah, I dont envision the state allowing MSP to be the only metro area in the country without Uber. Somethings going to happen.

I'll wait to judge until they finally do leave.

Even if they do leave, a company will just rise up to fill the gap. That's how capitalism works. Lyft and Uber don't control the market, the people do. So if they want to leave, someone will just create a business that adheres to it and makes billions of dollars while Uber and lyft fuck off to wherever, and this could start a thing nation wide where California does this, or Arizona, or Florida or New York, or Illinois.

Adapt or perish.

There is a lot of business there to be had. But theres a risk that laws like this catch on elsewhere in which the decreased profitability outweighs the current market in Minneapolis.

I think they would just jack up the fees for the city

chaos_knight posted...

Minneapolis is about to enter the Find Out phase of such stupid policies.

They will find out how these tech bro dystopian "gig economy" jobs are a net bad for a community.

Caelthus posted...

They only see the $$ signs. They don't see the reality that this will cause.

What reality? Another company will pop up that is willing to pay drivers better and still turn a profit?

Torgo posted...

They will find out how these tech bro dystopian "gig economy" jobs are a net bad for a community.

Under the premise that it's a gig job, aka a side hustle for extra cash, I don't see how it's bad for the community. People get cheaper than cab service and much faster, drivers get side cash. What's the net bad here?

Uber are banned in my country for tax fraud and unsafe driving without prober insurance.

voldothegr8 posted...

Under the premise that it's a gig job, aka a side hustle for extra cash, I don't see how it's bad for the community. People get cheaper than cab service and much faster, drivers get side cash. What's the net bad here?

It's undercutting an industry and driving down wages while exploiting workers who sacrifice their own vehicles to be on an app that takes ultimately extracts most of the profit from your labor. It's an objectively exploitative model.

I'm not here to say taxi and driver services were perfect and they probably needed some updating, but clearly this is a crisis created by lack of good public transportation and wage stagnation.

There will just be a competitor that steps in to replace them

When you break it down, what exactly do these 'gig' jobs actually provide? Uber Eats basically calls in a food order and someone picks it up and takes it to you. It's delivery, but for everyone. Nothing major. Uber is basically a taxi service on demand. Again, nothing major. Shipt is basically the same thing as Uber Eats, but it's a grocery list instead, of all the jobs, that person is easily doing the most work.

With all 3 of these jobs, the person is getting a fraction of what the app is, when the app doesn't actually do anything. You'd be better off creating an app where all these people can essentially provide their utility and allow them to bid on requested jobs.

Task rabbit did something like that forever ago.