Minneapolis officials push for 2 month delay as the rideshare crisis continues
Uber and Lyft stickers are prominently displayed on driver Farhan Badel’s Toyota Camry as he drives during a shift in Minneapolis on March 28.
Ben Hovland | MPR News
Updated: 2 p.m.
The future of rideshare services like Uber and Lyft in the Twin Cities is once again in limbo. The Minneapolis City Council is considering delaying the start date of new policies on rideshare driver pay.
City Council President Elliott Payne, along with members Katie Cashman and Aurin Chowdhury, announced that on Thursday, they will vote to extend their requirement for minimum pay for rideshare drivers to July 1. The original start date was May 1.
The council president joined MPR News host Cathy Wurzer to answer some pressing questions.
Use the audio player above to listen to the full conversation.
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Correction (April 10, 2024): The previous headline of this story incorrectly stated how many months officials have delayed the increase. This has been corrected.
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Audio transcript
CATHY WURZER: Here's the other big story we're following. The future of rideshare services like Uber and Lyft in the Twin Cities is once again in limbo. Minneapolis City Council President Elliott Payne, along with members Katie Cashman and Aurin Chowdhury, announced that tomorrow they will vote to delay implementation of a new ordinance requiring minimum pay for rideshare drivers.
That ordinance was to have taken effect May 1. Council members say they like to move it to July 1. Council President Payne is on the line right now. Thanks for taking the time.
ELLIOTT PAYNE: Thanks for having me.
CATHY WURZER: What led you and your colleagues to determine May 1 is not a workable date for implementation?
ELLIOTT PAYNE: So we've been working really closely with our partners at the State Capitol to ensure that we have a Minneapolis-specific policy that is really well aligned with the statewide policy. And when we met with the leadership of both the House and Senate a couple weeks ago, they felt very confident that they would be able to move forward and meet that May 1 deadline.
In the meantime, they've been doing a lot of deliberation with a lot of complex conversations between multiple stakeholders both within the House, Senate, and also with the governor. And they just realized they needed a little bit more time so that they can complete their legislative work. And we wanted to make sure that they had the time to do that in a really deliberative way.
CATHY WURZER: Why is it important to have a statewide bill?
ELLIOTT PAYNE: Well, Uber and Lyft are very regional companies in that the metro area represents about 95% of all rides in the state. And so a city-specific policy is extremely important because we are the number one place for those rides begin and end. But we know that it has impacts across the metro and the state. And we wanted to make sure that those worker protections were not just exclusively limited to the city of Minneapolis.
CATHY WURZER: Evidently, Council Member Jenkins and Council Member Koski are proposing an amendment to the ordinance that would adjust the mile rate to $1.21, which I believe is a drop in per mile-- the per mile rate from the current ordinance. It's a little confusing for some folks. Would you agree to tweak the pay rate at this point?
ELLIOTT PAYNE: So we have our professional staff really digging into the DLI data, the Department of Labor and Industry data, to really validate how they came to the $1.21 rate. And the big question that I've had is, are we trying to guarantee an average wage or guarantee a minimum wage? And when you take into account the expenses that drivers are incurring, putting a lot of wear and tear on these vehicles, on average a $1.21 is supposed to accommodate that wear and tear and those vehicle expenses.
But we know that that's only going to meet the average need. We want to look for a rate that is capturing the majority of drivers and their circumstances. And so our professional staff are looking into that. We wanted to bring this extension forward so that our staff had that time to do that as well so that they didn't have to be rushed. And I'm looking forward to the findings that they share with us.
CATHY WURZER: I know some of your colleagues are seeing this potential-- this extra time between now and July 1 is a chance to figure out how to keep Lyft and Uber in the metro area. Other council members think it lives more time to get some alternative rideshare companies in here. What's your preference here?
ELLIOTT PAYNE: Well, that's ultimately a factor. We want to make sure that we have a really robust rideshare network within the city of Minneapolis. And we want that to be a healthy market. And what we've seen in the past is this market is not a healthy market.
We have these venture-backed companies that were able to really pour a lot of money into this market and drive the traditional taxi companies out by artificially lowering prices for riders and artificially paying drivers a pretty good premium to convince them to change from being taxi drivers to being Uber drivers and Lyft drivers.
Now that COVID has happened, and these companies are no longer startups-- they are fully public companies-- they need to show a return for their investors. And so that means that they've been squeezing drivers and increasing rates on riders. And so it's extremely important that we have a healthy marketplace. We think this ordinance helps us get there. And that's actually reflected in the fact that we have a lot of competitors really interested in launching here in Minneapolis.
CATHY WURZER: Is it possible that if this passes the council tomorrow to give more time, to extend, is it possible the delay could lead to rescinding this ordinance and going back to the drawing board?
ELLIOTT PAYNE: No, that's not a future that I would envision. We need to act. We need to make sure that we're passing legislation that protects drivers. They're extraordinarily vulnerable. They're extraordinarily exploited. The DLI report showed that the predominantly Black, brown, and immigrant drivers, the majority of the rides are delivered by a minority of the drivers.
And so you do have thousands of part-time drivers. But they do a very small lift when it comes to-- no pun intended-- when it comes to the total rides that are delivered in the city. Majority of those rides are delivered by a largely immigrant workforce. And they have been left out to dry for too long. So there's not going to be a path where we rescind this.
CATHY WURZER: And do you-- I don't presume anything here. Will the July 1 extension pass tomorrow?
ELLIOTT PAYNE: I believe the votes are there to pass tomorrow for the extension, absolutely.
CATHY WURZER: All right. President Payne, thank you for your time.
ELLIOTT PAYNE: Thank you.
CATHY WURZER: We've been talking to Minneapolis City Council president Elliott Payne.
That ordinance was to have taken effect May 1. Council members say they like to move it to July 1. Council President Payne is on the line right now. Thanks for taking the time.
ELLIOTT PAYNE: Thanks for having me.
CATHY WURZER: What led you and your colleagues to determine May 1 is not a workable date for implementation?
ELLIOTT PAYNE: So we've been working really closely with our partners at the State Capitol to ensure that we have a Minneapolis-specific policy that is really well aligned with the statewide policy. And when we met with the leadership of both the House and Senate a couple weeks ago, they felt very confident that they would be able to move forward and meet that May 1 deadline.
In the meantime, they've been doing a lot of deliberation with a lot of complex conversations between multiple stakeholders both within the House, Senate, and also with the governor. And they just realized they needed a little bit more time so that they can complete their legislative work. And we wanted to make sure that they had the time to do that in a really deliberative way.
CATHY WURZER: Why is it important to have a statewide bill?
ELLIOTT PAYNE: Well, Uber and Lyft are very regional companies in that the metro area represents about 95% of all rides in the state. And so a city-specific policy is extremely important because we are the number one place for those rides begin and end. But we know that it has impacts across the metro and the state. And we wanted to make sure that those worker protections were not just exclusively limited to the city of Minneapolis.
CATHY WURZER: Evidently, Council Member Jenkins and Council Member Koski are proposing an amendment to the ordinance that would adjust the mile rate to $1.21, which I believe is a drop in per mile-- the per mile rate from the current ordinance. It's a little confusing for some folks. Would you agree to tweak the pay rate at this point?
ELLIOTT PAYNE: So we have our professional staff really digging into the DLI data, the Department of Labor and Industry data, to really validate how they came to the $1.21 rate. And the big question that I've had is, are we trying to guarantee an average wage or guarantee a minimum wage? And when you take into account the expenses that drivers are incurring, putting a lot of wear and tear on these vehicles, on average a $1.21 is supposed to accommodate that wear and tear and those vehicle expenses.
But we know that that's only going to meet the average need. We want to look for a rate that is capturing the majority of drivers and their circumstances. And so our professional staff are looking into that. We wanted to bring this extension forward so that our staff had that time to do that as well so that they didn't have to be rushed. And I'm looking forward to the findings that they share with us.
CATHY WURZER: I know some of your colleagues are seeing this potential-- this extra time between now and July 1 is a chance to figure out how to keep Lyft and Uber in the metro area. Other council members think it lives more time to get some alternative rideshare companies in here. What's your preference here?
ELLIOTT PAYNE: Well, that's ultimately a factor. We want to make sure that we have a really robust rideshare network within the city of Minneapolis. And we want that to be a healthy market. And what we've seen in the past is this market is not a healthy market.
We have these venture-backed companies that were able to really pour a lot of money into this market and drive the traditional taxi companies out by artificially lowering prices for riders and artificially paying drivers a pretty good premium to convince them to change from being taxi drivers to being Uber drivers and Lyft drivers.
Now that COVID has happened, and these companies are no longer startups-- they are fully public companies-- they need to show a return for their investors. And so that means that they've been squeezing drivers and increasing rates on riders. And so it's extremely important that we have a healthy marketplace. We think this ordinance helps us get there. And that's actually reflected in the fact that we have a lot of competitors really interested in launching here in Minneapolis.
CATHY WURZER: Is it possible that if this passes the council tomorrow to give more time, to extend, is it possible the delay could lead to rescinding this ordinance and going back to the drawing board?
ELLIOTT PAYNE: No, that's not a future that I would envision. We need to act. We need to make sure that we're passing legislation that protects drivers. They're extraordinarily vulnerable. They're extraordinarily exploited. The DLI report showed that the predominantly Black, brown, and immigrant drivers, the majority of the rides are delivered by a minority of the drivers.
And so you do have thousands of part-time drivers. But they do a very small lift when it comes to-- no pun intended-- when it comes to the total rides that are delivered in the city. Majority of those rides are delivered by a largely immigrant workforce. And they have been left out to dry for too long. So there's not going to be a path where we rescind this.
CATHY WURZER: And do you-- I don't presume anything here. Will the July 1 extension pass tomorrow?
ELLIOTT PAYNE: I believe the votes are there to pass tomorrow for the extension, absolutely.
CATHY WURZER: All right. President Payne, thank you for your time.
ELLIOTT PAYNE: Thank you.
CATHY WURZER: We've been talking to Minneapolis City Council president Elliott Payne.
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