Days before the Minneapolis City Council is expected to reconsider the pay floor in a controversial rideshare ordinance, Mayor Jacob Frey and a group of business leaders and disability activists urged council members to lower the city’s minimum rates.
Frey said he supports pay increases for drivers, but asked the City Council to consider the impact if Uber and Lyft leave the city, as they have threatened.
“The reality is that we have countless people that will be dramatically affected by the exit of Uber and Lyft,” Frey said at Monday’s news conference.
The Minneapolis ordinance sets a pay floor of $1.40 per mile and $0.51 per minute, or $5, whichever is higher, for the time transporting a rider within city limits.
Uber and Lyft have said those rates are too high and that they would leave Minneapolis—and in the case of Uber, the entire Twin Cities metro—by May 1 if the city doesn’t reconsider.
The rideshare giants have pointed to a state study that found rates of $0.89 per mile and $0.49 per minute would meet Minneapolis’ minimum wage of $15 an hour.
Frey was joined by dozens of supporters on Monday including Council Members Andrea Jenkins, LaTrisha Vetaw, and Linea Palmisano.
Both Vetaw and Palmisano have voted against rideshare policy changes in Minneapolis, but Jenkins has supported some of the minimum pay proposals, including the ordinance passed by the council on March 14 setting the new rates.
“I made a decision based on the information I had in front of me and then now we have new information,” Jenkins said Monday.
On Thursday, the City Council will reopen debate on the ordinance and could vote to alter the minimum rates they approved in March. Council Member Robin Wonsley, the author of the bill, has said in the past she wants drivers to get paid the Minneapolis minimum wage.
A city analysis showed some other compensation models could get drivers to the $15 hourly minimum.
Business, disability leaders line up behind mayor
Among supporters present on Monday were also leaders of the disability community and the hospitality industry.
Angie Whitcomb, CEO of Hospitality Minnesota, said the industry has 180,000 employees in the metro area, and 40% of those workers rely on rideshare services to get them to and from their jobs.
Whitcomb said Uber and Lyft leaving would negatively impact an already existing shortage of workers since people won’t be able to get to work. It’d also affect tourism.
“We cannot afford to actively discourage visitors or events coming into our region because of transportation limitations or higher market costs,” Whitcomb said.
Corbb O’Connor, president of the National Federation of the Blind Minnesota, told those present on Monday that the City Council “got it wrong” with their rideshare ordinance.
He said alternative services will need to learn how to work with people with disabilities, and their drivers might not be properly trained.
“Others coming into the market will have a steep learning curve and … will need to work with organizations like the National Federation of the Blind in Minnesota to make sure that we get this right,” O’Connor said.
Frey told members of the media on Monday he didn’t believe rideshare alternatives could fill the gap left by Uber and Lyft by next month.
Of the rideshare companies that have expressed interest in entering the market only one has submitted its transportation network company license application to the city, he said.
“We’re only aware of one that has begun to go through the licensure process and they don’t have insurance yet,” Frey said.
The owner of rideshare app Moov told the Star Tribune that his application is nearly approved by the city.
The state of Minnesota requires rideshare companies to hold $1.5 million in liability insurance. In Minneapolis, licensed transportation network companies (TNCs) must pay a fee of more than $37,000 and a wheelchair surcharge of $10,600, according to the city’s website.
Amy Lingo, manager of licenses and consumer services for the city’s Community Planning and Economic Development (CPED) department, clarified that four rideshare companies are in the process of getting a license. None has been approved yet.
She said all four have filed applications, and the next step involves receiving the proper payments that would then trigger the formal review process.
“It is possible that these steps could be completed by May 1, 2024,” Lingo said.
Committee tables funding to help startup rideshare apps
Earlier Monday, the Minneapolis City Council’s Budget Committee met and discussed the possibility of allocating $150,000 from the city’s general fund to help publicize and promote rideshare alternatives with the help of Meet Minneapolis.
Wonsley withdrew the motion before allowing staff to discuss small business financing already available through CPED that could be used by up-and-coming rideshare companies.
”We have learned that there’s a number of barriers and issues that they’re [alternate rideshare companies] experiencing as they’re preparing to enter into the market and wanting to make sure that as a city we’re being attentive and responsive to some of those needs,” Wonsley said.
According to her, the council members who initially brought up the agenda item were trying to be considerate of other small businesses wanting to apply for loans through CPED since the funding is limited before being reassured by city staff that the loan programs could handle the increased demand.
