In a 9-4 vote, the Minneapolis City Council has passed an ordinance on Thursday, ensuring minimum pay for rideshare drivers. The decision comes despite concerns raised by council members about an impending report from a state task force on rideshare economics, scheduled to be released the following day.

Uber and Lyft have threatened to withdraw their services from the city if the ordinance is implemented. In fact, both Mayor Jacob Frey and Governor Tim Walz had previously vetoed similar proposals, both at the city and state level, last summer. Frey has once again expressed his intention to veto the ordinance, although the City Council's overwhelming vote suggests they may have enough support to override the veto.

Under the new ordinance, rideshare drivers will be guaranteed 80% of the canceled rides and earn a minimum of $5 per ride. Several council members hailed the passage of the ordinance as "a win for workers, by workers." They argue that this move will rectify a loophole in the city's existing minimum wage law.

Council Member Jason Chavez of Ward 9 emphasized the importance of holding multi-billion dollar out-of-state tech companies accountable. "No company should be above the law," Chavez said. "Relying on low-income riders to subsidize Uber and Lyft paying drivers' wages is an economic and racial injustice."

In response, Lyft has urged its drivers and users to sign a petition opposing the ordinance, claiming that the proposed regulations would almost double the prices for rides in the city. Both Lyft and Uber have threatened to withdraw their services from Minneapolis on May 1, which is the new implementation date following an amendment by the council.

Uber stated that the Council has disregarded the ongoing state process and the recommendations put forth by the task force. They argued that a minimum earnings standard for drivers should be legislated based on collected data and collaborative efforts between all stakeholders. Lyft expressed support for a minimum earnings standard but stressed the importance of implementing it in a way that allows them to operate affordably and sustainably for riders.

Shortly after the City Council's vote, Mayor Frey's office confirmed that he will issue a veto before the end of the day. Frey argued that passing policy without considering the upcoming statewide report is irresponsible. He reiterated the need for dialogue and collaboration with the rideshare companies to find a mutually beneficial solution.

Last summer, Governor Walz established a committee to study ridesharing in the state, and the findings of this committee are expected to be released on Friday. It is worth mentioning that New York, Washington State, and California all have laws in place that establish minimum pay standards for rideshare drivers, and both Lyft and Uber continue to operate in these states.

As the controversy surrounding minimum pay for rideshare drivers continues, the fate of the ordinance in Minneapolis remains uncertain. Only time will tell if the City Council's stance will prevail and whether Uber and Lyft will stay true to their threats to withdraw their services from the city.