Uber and Lyft to Exit Minneapolis in 2025 Due to New Wage Rules - Impact on Drivers and Riders

Bill McColl brings over 25 years of expertise as a senior producer and writer across TV, radio, and digital platforms, leading teams in delivering impactful news coverage on major events.

Essential Highlights

• Uber and Lyft announce they will halt services in Minneapolis from May 1, 2024, due to newly enacted wage laws.
• The Minneapolis City Council approved a regulation mandating a minimum $5 per ride, $1.40 per mile, and $0.51 per minute pay for rideshare drivers, aligning with the city's $15.57 hourly minimum wage.
• The companies warn that this decision affects thousands of drivers and could disrupt transportation options for residents.

Starting May 1, 2024, residents of Minneapolis should anticipate the absence of Uber (UBER) and Lyft (LYFT) services in the city.

This move follows the city council's adoption of new wage standards requiring rideshare drivers to receive fair compensation, including a base fare and mileage and time-based payments, ensuring earnings comparable to the city's minimum wage of $15.57 per hour.

Uber expressed disappointment in a statement to Investopedia, criticizing the council for disregarding data and effectively pushing Uber out of the Twin Cities, which they say will impact approximately 10,000 drivers and leave many riders without options.

Lyft labeled the legislation as "deeply flawed," stating that many drivers depending on Lyft for income would see reduced earnings, and that the new rules could create unsustainable conditions for customers.

Lyft plans to continue advocating for a balanced statewide policy in Minnesota that supports both drivers and riders and hopes to resume operations in Minneapolis in the future.

City Councilman Jamal Osman, co-author of the wage policy, emphasized that the regulation protects drivers from exploitation and ensures they receive dignified minimum wages comparable to other workers.

“Drivers are human beings with families,” Osman noted on social media platform X, “and they deserve fair compensation.”

Following the announcement, shares of both Uber Technologies and Lyft experienced declines in the market.

For news tips, contact Investopedia reporters at tips@investopedia.com.

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