Uber Strikes a Major Deal in Minneapolis, Leaving Lyft Behind
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Chapter 1: The Veto and Its Implications
Minneapolis Mayor Jacob Frey has rejected a city ordinance aimed at establishing a minimum wage and protections for drivers working with Uber and Lyft. Instead, he unveiled an agreement with Uber that guarantees its drivers a minimum of $15 per hour and an additional $5 per trip in the metro area. Unfortunately, this arrangement does not extend to Lyft drivers, who will continue to earn below the city's minimum wage.
The City Council had approved the ordinance the previous week after extensive discussions involving drivers, city officials, and national experts. The proposed legislation was designed to mandate that ride-hailing companies pay drivers no less than $15 per hour, cover expenses, offer paid sick leave, and provide health care subsidies. It also aimed to empower drivers to form unions, drawing inspiration from similar legislation in Seattle, which was upheld by a federal appeals court last year.
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Section 1.1: Voices from the Community
Many drivers in the city, predominantly African immigrants, have been advocating for equitable pay and improved working conditions. Reports indicate that some drivers were earning as little as $5 per hour after costs, facing discrimination and harassment from both customers and the companies themselves. This led to the formation of the App-Based Drivers Association (ABDA), which organized rallies, petitions, and strikes to urge the city to adopt the ordinance.
"This is an inexcusable betrayal of Minneapolis workers. It is a slap in the face to the hundreds of drivers who have organized for years to win basic workplace rights," stated Abdi Muse, executive director of ABDA.
Subsection 1.1.1: The Mayor's Justification
Mayor Frey explained that he vetoed the ordinance due to its "legally indefensible" nature, claiming it would expose the city to expensive lawsuits from ride-hailing firms. He emphasized that the agreement with Uber would benefit over 90% of their drivers, labeling it as "groundbreaking" and "guaranteed" by Uber.
"We are proud to partner with Mayor Frey on this groundbreaking agreement that will guarantee earnings for drivers, no matter how many trips they complete," said Danielle Burr, head of Uber's federal affairs.
Section 1.2: Exclusion of Lyft Drivers
However, the deal exclusively benefits Uber drivers, leaving Lyft drivers—who represent about 40% of the ride-hailing market in Minneapolis—out of the equation. Lyft has stated that it was not involved in the negotiations and does not accept the terms set forth. As a result, Lyft drivers will continue to earn less than $15 an hour and lack any additional benefits.
"Lyft remains committed to working with the city on a path forward that benefits drivers, riders, and the community," commented Lyft spokeswoman Campbell Matthews.
Chapter 2: Unaddressed Concerns
The agreement with Uber fails to tackle various issues raised by drivers, including health care subsidies, paid sick leave, union representation, driver safety, and accountability from customers. Furthermore, the deal lacks legal binding and enforceability by either the city or the drivers, leaving uncertainty over how Uber will ensure compliance.
"This is not a deal. This is a giveaway to Uber," remarked Council Member Phillipe Cunningham, a sponsor of the vetoed ordinance. He criticized the agreement for its lack of transparency, enforceability, and comprehensiveness. Cunningham expressed intentions to seek a two-thirds majority vote from the City Council to overturn the mayor's veto.
"We have been fighting for this for a long time. We are not asking for too much. We are asking for dignity, respect, and a living wage," asserted Mohamed Ibrahim, a driver and leader of the Minnesota Workers Center.
Relevant articles:
- Minneapolis mayor vetoes measure for minimum wage to Uber and Lyft drivers, Associated Press, August 22, 2023
- Minneapolis Mayor Jacob Frey vetoes rideshare minimum wage measure, CBS News, August 22, 2023
- Frey vetoes Minneapolis City Council's minimum wage ordinance for Uber, Lyft drivers, Twin Cities Pioneer Press, August 22, 2023
- Uber, Lyft Driver Minimum Pay Bill Vetoed by Minneapolis Mayor, Bloomberg Law, August 22, 2023
- Frey vetoes rideshare benefits but announces pay boost for Uber drivers, Star Tribune, August 22, 2023
The first video features Minneapolis Mayor Frey discussing the recent Uber/Lyft proposal and his rationale behind the veto, providing insights into the negotiations and future implications for drivers.
The second video captures the press conference held on April 8, 2024, detailing the impact of Uber and Lyft's departure from Minneapolis, alongside reactions from various stakeholders.
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