Uber, Lyft to stop operations in Minneapolis over minimum wage law

https://www.reuters.com/technology/uber-lyft-stop-operations-minneapolis-over-minimum-wage-law-2024-03-15/

by mfiguiere • 2 years ago

42 94 2 years ago

bogota10• 2 years ago

“Wage theft” what? It’s very transparent what you are getting paid and what the deal is when you drive for uber or lyft.

Argue all you want for thinking that law makers should be setting special wages for specific industries. Personally i think they should stay out of it but man i would be mad as someone living in the city that these services are no longer available.

kypro2• 2 years ago

If you think you're mad as a consumer, imagine all the Uber/Lyft drivers who no longer have any income because the government has made it uneconomical for their employer to do business in their city.

crooked-v• 2 years ago

If they can't pay even minimum wage, it was already uneconomical and being subsidized by government welfare.

bradleyankrom• 2 years ago

Or maybe it's a splash of reality for those businesses that have relied on undercompensated labor and VC money to acquire market share.

goalonetwo4• 2 years ago

that is the dirty truth. All of those feel-good minimum wage laws are in fact stealing wages from those workers. Those workers were OK to work for those wages before the law. Now they have nothing.

The result is now higher unemployment and use of tax-dollar to subsidize those people.

bluefirebrand• 2 years ago

I think I'm more angry about employers feeling so entitled to labor that they would rather close their doors and fire everyone than pay them even remotely fairly

lostlogin2• 2 years ago

Do you have a view on child labour laws?

tbwriting• 2 years ago

They were literally caught red-handed doing this in New York. https://ny1.com/nyc/manhattan/traffic_and_transit/2024/01/19...

waveBidder2• 2 years ago

If it weren't an oligopoly I'd be less inclined to endorse government interference in wage setting. I'd frankly rather the twin cities just spin up their own rideshare marketplace, they have a great carshare system[0], would love to see them expand into rideshare too.

[0] https://eviecarshare.com/

bogota10• 2 years ago

I saw what it took to build both Uber and Lyft. I know that the government will bot be able to reproduce it in any way unless you are fine with a terrible user experience and times where no rides are available

goalonetwo4• 2 years ago

I would be even more mad if I was driving for Uber in those cities and overnight the government made the decision for me to remove that as an income option.

jakelazaroff2• 2 years ago

According to the article, Uber and Lyft made the decision to stop operating, not the government.

kstrauser3• 2 years ago

I’d be furious if the government told my employer they had to pay me overtime, and my employer closed up shop rather than abide by the same rules as everyone else.

This is Uber’s fault, not the government’s fault for enforcing basic employee rights.

LoganDark2• 2 years ago

That's exactly how Uber wants you to think. That's what they're doing: making it seem like the law is preventing them from operating (they just don't want to pay reasonable wages) so that the people get mad and vote it out, at which point they can simply continue to pay unlivable wages again.

olliej• 2 years ago

It's wage theft, because the law says you owe employees minimum wages by law, and if you aren't paying them that amount, you're stealing the excess from your employees.

The fact that you think you should be allowed to pay people less than the legal requirement is not relevant, the law says you owe people $X, so if you pay them less than X, it is theft.

The problem Lyft and Uber have is the same AirBnB is starting to run into: if your business model is misclassifying things (employees in the lyft/uber case, and hotels in the airbnb case, etc), eventually either (as in NY) court cases will force you to pay what you owe, or as here legislation will be passed to make it so that whatever the company is misclassifying things as, will be covered by the regulations the apply to what they actually are.

Seriously, if your business model is pretending that your specific implementation of X is not the same X covered by existing laws, your implementation will eventually have to comply with the regulations that apply to X.

bogota10• 2 years ago

Its pretty hard to apply min wage intended for w2 to gig work when the laws are treating you as both.

So they have to let the drivers have complete freedom over what they do and what rides they take and when they do it. But also you have to follow min wage laws which apply when?

Im sure Uber and Lyft can redesign the system to work with this model and im sure the consumer will hate the new prices.

sunshowers• 2 years ago

Look up "monopsony". Also, it's not at all transparent what cut Uber and Lyft are taking from a ride.

erehweb• 2 years ago

They have taxis in Minneapolis, no? And ones that have apps available as well, as far as I can tell. Couldn't they just pick up the slack?

bogota10• 2 years ago

Good luck!

ProxCoques• 2 years ago

man i would be mad as someone living in the city that these services are no longer available.

Before Uber, we had these things cal... oh never mind.

bogota10• 2 years ago

Oo yeah im familiar. They suck. Thanks for the history lesson though!

It’s been shown drunk driving drops with uber because cabs will ignore you outside of a select few cities.

As a college student i had multiple cabs try to scam me or overcharge and this was if they would even show up at all leaving me to walk miles and in one case getting robbed at gun point because of it. But yeah lol its the same as uber.

jrockway• 2 years ago

Hopefully more cities pass laws like this. Minneapolis must be enjoying a reduction in traffic congestion as people move onto public transit.

newfriend2• 2 years ago

I wonder how the people who relied on income from driving must be enjoying the reduced traffic.

mattigames• 2 years ago

Its not like self driving cars where not going to take their jobs soon after anyway right? All this rush to push tech forwards isn't for that end?

thrownaway133715• 2 years ago

Yeah it's unfortunate a corporate giant would rather throw them to the street rather than pay them a living wage. It's a good thing to root out exploitation like Uber and Lyft.

tiahura• 2 years ago

And enjoying the dui fatalities.

cowboyscott• 2 years ago

I suggest reading the report by the Minnesota Department of Labor [0].

Some interesting pulls from the summary:

Census data and the driver survey indicate the majority of Minnesota TNC drivers are male immigrants and predominantly Black or African American non-Hispanic workers with less than a four-year college degree; many live in low-income households (up to 200% of the federal poverty level) and, relative to all Minnesota workers, are disproportionately reliant on public assistance.
Nearly half (45 percent) of those driving for Uber and Lyft are relatively casual drivers averaging fewer than 10 hours per week and providing only 11 percent of all trips. The focus here is on the committed, non-casual driver since they are more likely to rely on TNC driving as a primary source of income and provide the majority of trips.
Median earnings for all Twin Cities metro area drivers were $50.04 on a gross passenger time (P3) basis, $29.64 on a gross working hours basis (P1+P2+P3), and $13.63 on a net, after-expense working hours basis. Twenty-five percent of drivers had net, after-expense hourly earnings of $10.54 or less, and 25 percent of drivers had net after-expense hourly earnings of $17.51 or more.
The Minnesota per minute rate is designed to compensate drivers at the equivalent of the minimum wage, plus the employer share of federal Social Security and Medicare payroll tax: ($15.57 Minneapolis minimum wage plus $1.28 in payroll tax in the Twin Cities metro area, and $10.85 state minimum wage plus $0.89 in payroll tax for the Greater Minnesota counties). The Minnesota base per mile rate provides for the 63.8 cents per mile cost of acquiring, operating, and maintaining a vehicle based on Minnesota-specific costs from early 2024.
Applying the 2024 base rate pay standard per minute and per mile rates to the hours worked and miles driven during 2022 indicates that average pay per trip for Twin Cities drivers would rise by about 10 percent under the base pay standard, and by about 17 percent on average for Greater Minnesota drivers.

0: https://dli.mn.gov/sites/default/files/pdf/TNC_driver_earnin...

toss12• 2 years ago

> are disproportionately reliant on public assistance.

Whenever workers for a company are disproportionately reliant on public assistance, it means that the management has figured out a scam to get rest of the taxpayers to subsidize their business.

The taxpayers make up the difference between what is paid vs a living wage which would be required for those workers to sustainably work for the corp, and the management/shareholders pocket the difference.

QuercusMax4• 2 years ago

Absolutely. Companies like Walmart and McDonald's take advantage of this.

https://www.worldhunger.org/report-walmart-workers-cost-taxp...

newfriend2• 2 years ago

Not necessarily.

The barrier to earning income by working for Uber/Lyft is much lower than other jobs. Workers are not fungible. Some people make better employees than others. Those who are already on public assistance are more likely to be less reliable/capable.

If these folks could get a job with higher wages, wouldn't they already be doing that? Especially considering the freedom from forced scheduling that driving provides.

sabarn013• 2 years ago

What is the other option. Welfare exists as is and is just part of the social services offered by the government. For a lot of poor people there isn't a job that will offer them a living wage because they don't have skills yet to demand that. Bad jobs are ways to show that you have the skills to be on time come in everyday ect. Bad jobs allow people to build skills at low risk to the employer so they can demand higher wages over time.

Not everyone can work a full time job and the government shouldn't get in peoples way of earning money however they see fit.

tick_tock_tick6• 2 years ago

I'm glad we've decided on the solution of them now having no job and still requiring public assistance..... What a great morally superior decision we've made on their behalf I'm sure they'll thank us.

bovermyer• 2 years ago

Huh, I suppose that will affect my trip in May. Guess I'll be taking taxis instead.

Hopefully the situation has a net positive outcome for the community.

Edit: clarification - I hope the situation is resolved in a way that benefits everyone as much as possible and hurts as few possible.

nerdjon2• 2 years ago

We know that Uber and Lyft are very much taking advantage of the drivers here.

But there is a big question that I have yet to see answered by any of these laws, but it is possible that all of the articles I have read just conveniently gloss over this part.

My understanding is that to start driving for both of these companies it is a fairly low bar. There isn't any interviewing and basically anyone could do it if you have car (basically, I mean I am sure there are other checks but yeah).

You also don't work set hours, you work when you choose. You may choose to work when there is a lot of demand, but that is still up to you.

So how do these laws cover if there are too many drivers out at a certain time if there isn't demand for them? Is this only paying them for driving people?

Not trying to defend how they pay people, but it always seemed a bit more difficult than just pay them a certain wage or benefits.

CubsFan10602• 2 years ago

Not that I disagree with your first statement, but would you also say that consumers are taking advantage of the drivers?

nerdjon2• 2 years ago

Technically indirectly by supporting the companies, sure. But there is a disconnect between the drivers and users. What you may think they are being paid and actually paid.

usr11063• 2 years ago

Absolutely. That's one reason why I avoid platforms and use traditional businesses wherever I can (in Europe, so it's probably easier than in the US)

But it's not wrong to blame the platforms either for their miserable business model exploiting the poorer and removing worker rights.

tick_tock_tick6• 2 years ago

We know that Uber and Lyft are very much taking advantage of the drivers here.

Are they? There isn't anything quite like these kind of jobs for flexible hours. Want something extra this week drive for a few hours.

jmyeet• 2 years ago

Uber and Lyft are playing a deeper game: to stop other locales doing the same thing. They want to scare governments from acting on behalf of their "independent contractors".

You see exactly the same thing with efforts to unionize at Starbucks and Amazon. Both companies will spend millions on union-busting efforts. They will close locations (eg[1]). If you have an idealistic view you may think this is a simple economic decision for the affected locations. It is not. It's to scare people in other places from unionizing out of fear of losing their jobs.

Uber and Lyft absolutely do not want their "independent contractors" being treated as employees or having governments give them basic work conditions and minimum wages. So they will try and use Minneapolis as an example to other cities.

[1] https://www.wivb.com/news/local-news/starbucks-unionize-clos...

ChrisArchitect• 2 years ago

[dupe]

More discussion over here yesterday: https://news.ycombinator.com/item?id=39711041

Simulacra3• 2 years ago

Won't this mean that the taxi companies will fill the vacuum?

Solvency• 2 years ago

Has Uber or Lyft considered forcing drivers to bake fresh bread in their cars in order to skirt wage laws?

https://apnews.com/article/california-newsom-panera-fast-foo...

Uber, Lyft to stop operations in Minneapolis over minimum wage law

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