Uber, Lyft Postpone Minneapolis Exit as City Council Delays Minimum Wage Hike Until July

By Trisha Andrada

Apr 12, 2024 12:50 PM EDT

Ridesharing companies Uber and Lyft delayed their intentions to leave the Minneapolis market on May 1 following a two-month postponement in the effective date of the city council's minimum wage hike.

Mandated Minimum Wage Hike Delayed Until July 1

At a meeting on Thursday, Apr. 11, the Minneapolis City Council extended the enactment of the higher minimum wage until July 1, a unanimously approved move, CNN reported. Therefore, the legislators are expected to have more time to negotiate a fair salary with Uber and Lyft.

The two ridesharing companies threatened to pull out of the Minneapolis market if their drivers' pay was increased to $15.57 per hour, the city's minimum wage.

According to a statement that Uber sent to CNN on Thursday, the company hopes that all parties involved can now collaborate with the authorities to find a solution that " raises pay at the state level, protects flexibility, and keeps rides affordable."

Meanwhile, Lyft has stated its willingness to back the rates proposed by the Minnesota Department of Labor and Industry Research. These rates would boost earnings for existing drivers by 17%, achieving $15.57 hourly.

Ride-Hailing App Lyft Confirms Its Cutting Roughly A Quarter Of Its Workforce
Uber and Lyft postponed their Minneapolis departure on May 1 when the city council delayed a minimum wage raise until July 
(Photo : Michael M. Santiago/Getty Images)

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Divided Opinions on the New Policy

The New York Post indicated that some people have voiced concerns that the higher salary requirement may lead to soaring expenses for all consumers, particularly those with lower incomes or impairments who depend on ride-hailing services.

Yet, supporters counter that the companies have taken advantage of drivers, who are disproportionately immigrants and people of color, by paying them less than the market rate for their work.

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