Uber and Lyft Cease Operations in Minneapolis Rideshare Market Shift

Uber Technologies and Lyft have announced they will cease operations in Minneapolis from May 1, responding to the city council’s decision to enforce a minimum wage for rideshare drivers. Overriding Mayor Jacob Frey’s veto with a 10-3 vote, the council mandates a minimum wage of $15.57 per hour for drivers.

Expressing disappointment, Uber criticized the council’s move, highlighting potential job losses for around 10,000 people and the inconvenience it poses to many residents. Meanwhile, Lyft, labeling the bill as “deeply-flawed,” expressed hope for a comeback while advocating for a statewide resolution in Minnesota.

The decision follows a Valentine’s Day protest earlier this year by rideshare and delivery drivers demanding better pay and working conditions. In a separate development, the New York Attorney General’s office announced a substantial settlement, with Uber agreeing to pay $290 million and Lyft $38 million to resolve a significant wage theft investigation.

A recent study by the Minnesota state’s Department of Labor and Industry, published last week, indicates that potential price increases by the companies are unlikely to significantly affect consumer demand or commissions. This study casts doubt on fears of a substantial impact on the market due to increased wages for drivers.