Are Uber and Lyft leaving the Twin Cities? Here's what you need to know

MINNEAPOLIS — Rideshare apps Uber and Lyft are pumping the brakes on their exit date in Minneapolis after the city council agreed to pause their pay hike ordinance, giving more time for the legislature to find a state-wide solution and keep the rideshare companies on the roads.

Last year, Uber made a similar threat when a bill arrived on Minnesota Democratic Gov. Tim Walz's desk seeking to create a minimum wage for drivers. Walz made his first—and only—veto on the legislation, which would have made the state "one of the most expensive states in the country for rideshare," he said in his veto message.

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Here's what you need to know about the rideshare companies' planned exits and what's next for the city of 425,000.

Why are Uber and Lyft threatening to leave Minneapolis?

In March, the Minneapolis City Council overrode Mayor Jacob Frey's veto and passed a pay increase for the city's rideshare drivers.

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The ordinance would require ride-share companies to pay their drivers a minimum rate of $1.40 per mile, $0.51 per minute, or $5 per ride driven, whichever is bigger. Advocates for the ordinance say this would pay drivers the equivalent of Minneapolis' $15.57 minimum wage. Uber and Lyft say they won't make a profit at that rate.

A recent study commissioned by the Minnesota Department of Labor and Industry after Walz's veto found that to meet the city's minimum wage goal, companies only need to change their rates to $0.89 per mile and $0.49 per minute.

Lyft is threatening to leave just Minneapolis. But Uber said it would pull operations in the entire Twin Cities metro area, including the Minneapolis-Saint Paul International airport.

Is the legislature doing anything about it?

Shortly after the ordinance passed, Minnesota State House Republicans failed at an attempt to vote on their preemptive bill to prevent the city from enacting the pay hike regulation.

Democrats introduced a bill to entice the companies to stay in the area while also proposing rideshare rules and a minimum pay of $1.39 per mile and $0.49 per minute, similar to the new Minneapolis ordinance. Legislators say they are working with the city to be on the same page and are negotiating the language with Uber and Lyft to come to an agreement.

During a press conference for an unrelated topic on Wednesday, Gov. Walz said that an extension is a "positive first step."

"I think it's an acknowledgment from the broad base of community that there were going to be issues here, that May 1 was not doable," he said.

The legislature ends its 2024 session on May 20.

Uber said in a statement on Thursday that this "paves the way for all stakeholders to work with [Minnesota's] leaders on a statewide solution that raises pay at the state level, protects flexibility and keeps rides affordable."

Both Uber and Lyft will continue operating in the area until July 1.

— Sam Woodward is the Minnesota elections reporting fellow for USA Today. You can reach her atswoodward@gannett.com.