(ReclaimingAmerica.net) – In a move that could lead rideshare giants Uber and Lyft to leave an entire state, Minnesota legislators and the Minneapolis City Council have reached a consensus on a compensation plan for rideshare drivers that they claim is aimed at ensuring “equitable” wages.
However, this agreement was forged without the involvement of Uber and Lyft, the primary rideshare providers, and the companies have expressed a strong stance against the new rates, threatening to cease operations in Minnesota if these rates are implemented, National Review reports.
The compromise established this Monday stipulates that drivers will be paid $1.27 per mile and 49 cents per minute.
This rate is a reduction from the Minneapolis council’s initial requirement of $1.40 per mile and 51 cents per minute, as reported by the Star Tribune.
The council had earlier set its rates in March to align drivers’ earnings with the city’s minimum wage of $15.57 per hour.
Nevertheless, Uber and Lyft argue that such an increase in wages would render their services prohibitively expensive, potentially deterring customers from utilizing their platforms.
Despite the rates being adjusted downward, both rideshare giants maintain that the figures are excessively high and have criticized the exclusion of their voices in the negotiation process.
“[S]hould these statewide rates pass, we would be forced to shut down across all of Minnesota, not just Minneapolis,” stated a Lyft spokesperson, as per the Star Tribune.
An Uber spokesperson also conveyed dissatisfaction to the newspaper.
“Right now, the Legislature seems intent to negotiate with the Minneapolis City Council and not us,” the official said.
Contrary to Uber and Lyft’s resistance, the leadership of a progressive drivers’ advocacy group, which had advocated for higher compensation, has agreed to the modified pay rates.
Eid Ali, executive director of the Minnesota Uber/Lyft Drivers Association, acknowledged that although the compromise rate falls short of their aspirations, it represents a significant gesture of cooperation.
While Democrats in the state believe Uber and Lyft’s threats to exit are merely strategic bluffs, Republican lawmakers view the compromise as hazardous.
“I think there’s a real risk that tens of thousands of Minnesotans are the collateral damage of this reckless policy,” GOP State Senator Jordan Rasmusson reacted.
In response to the impending policy changes, the Minneapolis council delayed the enforcement of its new pay structure from May 1 to July 1, granting the Minnesota legislature additional time to potentially establish a statewide policy that could supersede the city’s ordinance.
This extension ensures that Uber and Lyft will continue operations in Minneapolis until at least July.
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