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Getting around in Minneapolis could become even more difficult after Lyft and Uber announced they are preparing to pull out of the city.
On Thursday, the Minneapolis City Council voted to increase driver wages to the city’s regional minimum wage of $15.57 an hour.
But that was too much of a burden for ride-hailing companies. The company is now at risk of pulling out of the city due to the introduction of a new minimum wage that would force drivers to pay a flat rate.
The decision comes after the City Council voted 10-3 to override the mayor’s veto of the city’s driver pay raise ordinance.
“This must be done in an honest manner to provide our passengers with affordable service,” Lyft said in a statement. “This ordinance makes our operations unsustainable and, as a result, we will cease operations in Minneapolis when the law takes effect on May 1.”
RELATED: Lyft becomes first rideshare company to introduce minimum wage for drivers
Uber issued a similar statement and provided it to local dealerships. fox 9.
“We are disappointed that the City Council ignored the data and kicked Uber out of the Twin Cities, leaving 10,000 people without jobs and leaving many stranded,” the company said in a statement. “But by working with all stakeholders – drivers, passengers, and state leaders – we can ensure drivers receive a fair minimum wage, protect their independence, and keep ridesharing affordable.” We know we can achieve comprehensive, statewide legislation that will.”
Related article: DoorDash, Uber Eats add new fees in New York to offset costs
Last month, Lyft became the first ride-sharing app to introduce a minimum wage for drivers by guaranteeing that drivers take home at least 70% of what passengers pay, regardless of outside fees.
“We hope this not only encourages more drivers to drive for Lyft, but strengthens the industry as a whole,” said Lyft CEO David Risher. Reuters at that time. “I think we have more drivers now than we’ve had since mid-2019. It’s strong and needless to say, it’s getting even stronger.”
If Uber leaves Minneapolis, it will be the only U.S. metropolitan area in the country without Uber.
As of Friday morning, Uber was up a whopping 140% year over year on the news. Lyft is up more than 93% during the same period.
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