Minimum Pay for Uber, Lyft Drivers in Minneapolis Pushed Back to July

With both companies having said they would pull out of the city when the minimum compensation ordinance went into effect at the start of next month — and news reports saying Uber UBER also would withdraw from the larger Twin Cities area, including the airport, which is not located in either Minneapolis or St. Paul — the days were growing shorter for any sort of compromise.

But in a unanimous City Council vote Thursday and signed by Minneapolis Mayor Jacob Frey on Friday, the effective date of the minimum compensation ordinance was pushed back to July 1.

Frey had vetoed the original ordinance but was overridden. In an article in the Star-Tribune, he said, "A delay is not a fix. While [the] council continues to make a mess of this, I'll be working with policymakers and partners from across the disability, hospitality, and business communities to find a path forward for drivers and riders."

The core of the bill is a requirement that transportation network company drivers be paid at least $1.40 per mile and 50 cents per minute for the time spent ferrying a passenger. If that calculation came in less than $5, that figure would become the minimum for the trip. The legislation also provided for possible annual revisions.

According to the Associated Press, council member Robin Wonsley, who was one of the leaders pushing through the original legislation, said "the delay would lead to better outcomes for drivers and riders, and lay a stronger foundation for a more equitable ride-hailing industry statewide." Wonsley said the current model for Uber and Lyft (NASDAQ: LYFT) is "extremely exploitative."

Separately, council member Jamal Osman said the additional two months gives other ridesharing companies more time to "come in, get set up and running" according to the Star Tribune. 

In the article, Osman identified companies that have applied for a license as Moov, MyWeels, Wridz and Joiryde. He said there were six others that have "expressed interest" in launching a rideshare business in Minneapolis but have not yet submitted license requests. 

He also said there was an ongoing effort to create a driver-owned cooperative to replace Uber and Lyft. 

On the same day the vote to delay implementation was approved, two council members introduced alternate legislation. It would cut the minimum payment as $1.21 per mile, down from $1.40 in the legislation now set for July 1, and 51 cents per minute. That latter figure is unchanged from the now delayed legislation.

According to the Star Tribune, Uber and Lyft back that proposal.  But the Star Tribune article  also said "a majority of council members were not on board with the plan."

State legislation also was introduced this past week that would provide for statewide minimum compensation less than what the Minneapolis city council has approved: $1.39 per mile and 49 cents per minute. It also has the $5 minimum. 

All the legislative proposals, approved or proposed, also have provisions for such things as fees for transporting passengers that use wheelchairs.

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