In a surprising turn of events, rideshare giants Lyft and Uber have decided to reverse their plans to cease operations in Minneapolis on May 1. This decision comes after the city council passed a measure to extend the deadline for implementing a new minimum wage for rideshare drivers. Originally set to go into effect on May 1, the minimum wage law has now been delayed by two months, with the new effective date set for July 1.

The issue surrounding the minimum wage law for rideshare drivers in Minneapolis arose from a decision made by the city council in March. Despite facing a veto from the mayor, the council had voted to establish a local minimum wage of $15.57 per hour specifically for rideshare drivers. This prompted Lyft and Uber to announce their plans to discontinue their operations in the city.

However, during a morning meeting, the Minneapolis City Council unanimously passed an extension to postpone the implementation of the minimum wage law. This move allows for additional time for lawmakers to negotiate and finetune the legislation. It also provides an opportunity for new ride-hailing services to enter the market.

Uber expressed its support for the council's decision in a statement, stating that it opens up avenues for collaboration with state leaders in Minnesota to create a statewide solution that ensures fair wages, protects flexibility, and maintains affordability for riders. Uber has committed to continuing its operations in the state until at least July 1.

Similarly, Lyft also confirmed that it will continue serving customers in Minneapolis until July 1. The company applauded the council for recognizing the flaws in their original ordinance and expressed optimism in finding a more balanced approach.

Notably, Minneapolis Mayor Jacob Frey, a Democrat, has voiced his support for a minimum wage for rideshare drivers. However, he opposed the original ordinance because it did not consider a Minnesota state study that assessed appropriate pay scales for drivers. The study found that drivers should be paid $0.89 per mile and $0.49 per minute, significantly lower than the stipulations in the ordinance.

In response to the concerns raised by Mayor Frey, some council members now propose amending the ordinance. The potential changes would lower the per-mile rate to $1.21 while maintaining the proposed per-minute rate at $0.51. These revisions aim to strike a balance between ensuring fair wages for drivers, stability for both drivers and riders, and a healthy and competitive market.

With this sudden turn of events, the focus shifts to further deliberation and negotiation between key stakeholders. The extension of the deadline for the minimum wage implementation provides an opportunity to address the concerns raised and work towards a solution that benefits all parties involved.