An Uber sign is displayed inside a car in Palatine, Ill., Monday, May 22, 2023. Credit: AP Photo/Nam Y. Huh

Uber and Lyft have threatened to cease operations in Minneapolis starting in 2024 if the City Council votes Thursday to approve a proposed ordinance granting rideshare drivers higher wages, according to messages sent to app users and the Minneapolis council Tuesday morning.

The ordinance would guarantee drivers a minimum compensation of $0.51 per minute and $1.40 per mile while they are transporting a customer. That would increase annually proportional to the city’s minimum wage. 

It would also allow drivers more rights when fighting “deactivations” or shutdowns of their accounts by the apps after a complaint, and grant them more safety features, such as not allowing riders to sign up to be picked up with a gift card. Riders using gift cards who engage in criminal activity are harder to trace, according to drivers.

The city’s Business, Inspections, Housing and Zoning Committee voted unanimously last week to pass the ordinance on to the full council for a vote on Thursday.

In a letter to the council, Lyft said the ordinance would make rider fares “too high” and undercut driver earnings by reducing ride volume in Minneapolis.

“Should this proposal become law, Lyft will be forced to cease operations in the City of Minneapolis on its effective date of January 1, 2024,” the letter said.

In an email to app users, Uber said it could be forced out of Minneapolis and asked users to email the mayor and council asking them to oppose the ordinance.

In May, Governor Tim Walz vetoed a bill passed by the House and Senate that would have increased wages for rideshare drivers statewide.

After his veto, the governor announced creation of a committee tasked with researching rideshare issues and helping shape policy for next year’s legislative session.

Before Walz’s veto, both Uber and Lyft had sent the governor letters opposing the bill, with Uber threatening to limit its app usage to the Twin Cities metro area.

Tuesday’s letters to the Minneapolis City Council mark the first time both apps have threatened to leave the state’s biggest city.

Nine votes needed to avoid Frey veto

As of Tuesday morning, four of the 13 council members had spoken to Sahan to say they support the proposed ordinance.

Council member Robin Wonsley, lead author of the proposed ordinance, along with fellow council members Jason Chavez and Jamal Osman, has led the effort to get the ordinance to a full council vote.

As of Monday afternoon, council member Elliott Payne had also pledged his support for the ordinance.

“Now that we are no longer in a zero-interest rate environment, these platforms are trying to become profitable at the expense of living wages for drivers,” Payne said. “This is not sustainable.”

Supporters of the ordinance need nine council members to vote for it to avoid a possible veto by Mayor Jacob Frey.

Frey previously told Sahan Journal he hasn’t made a final decision about whether he might veto it and that “there is essential information needed.”

Alfonzo Galvan is a reporter for Sahan Journal, covering work, labor, small business, and entrepreneurship. Before joining Sahan Journal, he covered breaking news and immigrant communities in South Dakota,...