COMP NEWS – A new bill that would require Uber and Lyft drivers to raise the pay of their drivers in Minneapolis is causing both companies to threaten to cease operations in the city.

A bill that would mandate minimum pay levels for Uber and Lyft drivers in Minneapolis, including a per-mile rate that is not all that far less than what national averages show it takes to hire a truckload carrier, will head to the desk of the city’s mayor, where its fate so far is unknown.

In a 7-5 vote, with one abstention, the Minneapolis City Council Thursday voted to approve legislation that would require several benchmarks be met for Uber and Lyft drivers to be paid.

Among them is a requirement that a driver of “Transportation Network Companies,” as the city refers to them, be paid $1.40 per mile and 51 cents per minute, the latter translating to about $15 per hour. The alternative would be to be paid $5, but the actual compensation would be whichever is greater.

The $1.40-per-mile rate is still less than the lower per-mile truckload rate recorded in the National Truckload Index (linehaul only) rate in SONAR. It has trended between $1.50 and $1.70 per mile since about mid-February but has dropped below $1.50 per mile at least one day during that time.

Lyft has not minced words over its position: if the bill passes, the company will immediately cease operations.

Rather than publically denounce the law, Uber is encouraging its drivers to oppose the bill themselves, warning that it could cause operations to gradually dry up rather than cease all at once.

Jeremy Bird, Lyft’s chief policy officer, sent a letter to Minneapolis City Council President Andrea Jenkins Tuesday that was unambiguous in its opposition: “Should this proposal become law, Lyft will be forced to cease operations in the city of Minneapolis on its effective date of January 1, 2024.”

Uber (NYSE: UBER) has not put out a broad public statement. However, various news reports said Uber had sent a letter to its drivers earlier this week requesting that they reach out to their elected representatives and oppose the bill. “If this bill were to pass, we would unfortunately have no choice but to greatly reduce service, and possibly shut down operations entirely,” Uber wrote in its letter to drivers, according to the news reports.

Lyft’s (NASDAQ: LYFT) three-page letter said it was asking the city of Minneapolis to wait for the policy recommendations of Minnesota’s Committee on the Compensation, Wellbeing, and Fair Treatment of Transportation Network Company Drivers. The letter describes it as a task force with a broad membership including drivers and Minneapolis government officials. The task force is “engaging with a broad and inclusive stakeholder group and doing so on a much more sensible timeline.”

Frey’s letter also referred to the statewide task force, according to MPR. 

To read more about Uber and Lyft leaving Minneapolis over pay disputes, click here.

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