A Midwestern city could lose operations from Uber (UBER) -) and Lyft (LYFT) -) after the passing of a new ordinance to which the ridesharing companies are severely opposed.
The Minneapolis City Council passed an ordinance on a 7-5 vote on Thursday, August 17 that establishes more rideshare driver protections, including a minimum wage for drivers. But Uber and Lyft are pushing back, threatening to halt operations in the city of 425,000.
Drivers within the city would earn a minimum of $1.40 per mile and $0.51 per minute, according to the new law.
The ordinance is not official yet as Minneapolis Mayor Jacob Frey has until Wednesday, August 23, to veto it.
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Lyft sent a letter to the council on Tuesday saying that it will “cease operations in the city of Minneapolis” by January 1, 2024 should the proposal be passed into the law. The company told CNN that it believes the bill would actually be worse for the drivers because it would force them to raise the prices of rides and that “only the most wealthy could still afford a ride.”
Uber emailed its drivers on Monday pushing for them to contact the Mayor and City Council to show opposition to the bill. The company said it may have “no choice” but to cut down on its operations or even close down entirely in the city should the bill be passed.
Frey told the city council in an email a day before the vote that he knows the bill will “significantly impact” the city and believes there must be “more time for deliberation.” But he also told CNN via email that he supports higher pay for rideshare drivers.
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