Minneapolis Just Passed a $15 Minimum Wage for Uber and Lyft Drivers – But Will the Companies Stick Around?
In a bold move that reverberated through the gig economy workforce, the Minneapolis City Council voted 9-4 in December 2023 to require ride-hailing giants Uber and Lyft to pay their drivers a minimum wage equivalent of $15.57 an hour.
The ordinance, which took effect on July 1, 2024, lays out a specific pay formula for drivers operating within the city limits: At least $1.40 per mile and $0.51 per minute when transporting passengers. In other words, every ride would have to net the driver a minimum of $5, whichever is higher.
It was a major victory for Minneapolis’ army of ride-share drivers who waged an intense two-year campaign demanding a living wage and better working conditions. Many of these drivers are immigrants from Africa.
"We have been waiting for this for a long time. Almost two years," an elated Ahmed Ahmed, flanked by dozens of fellow drivers, told reporters outside City Hall after witnessing the historic vote.
However, the battle continued. Mayor Jacob Frey vetoed the ordinance, aligning himself with Uber and Lyft’s vehement opposition to the plan.
Both companies issued warnings that they would be forced to shut down operations in Minneapolis if the pay requirements went into effect. Their argument? The city has a much higher proportion of low-income riders compared to places like New York City that have implemented similar regulations. Keeping service viable with significantly higher driver costs could prove impossible, they claimed.
"It doesn’t do any good to get a pay raise if you no longer have a job," a defiant Mayor Frey stated at a press conference, urging the Council to at least delay their vote until reviewing an upcoming state report examining 2022 ridership data across Minnesota.
The City Council overrode the veto with a 9-4 tally, confirming the ordinance.
In statements to the press, Uber and Lyft doubled down on their threats to halt service in Minneapolis starting July 1, 2024, if the new rules held:
"We support a minimum earnings standard for drivers, but it must be done in a way that allows the service to sustainably and affordably operate for riders," Lyft spokesperson CJ Macklin said.
Uber took a more hardline stance, not even responding to requests for comment from major publications covering the vote.
The companies’ brinkmanship was questioned by progressive council members who approved the ordinance. As Council Member Jamal Osman bluntly put it: "The fear of these companies leaving does not make it OK to rely on people of color and immigrants for cheap labor."
Indeed, Uber and Lyft previously issued similar doomsday warnings in New York City and Seattle when those cities passed comparable pay requirements for ride-app drivers. Yet they ultimately remained operational after implementing temporary price increases, suggesting the threats could be an empty gambit.
Some more moderate voices on the Council expressed concerns about knock-on effects across Minnesota if Uber and Lyft did make good on pulling out of Minneapolis. Many rides span between the city and surrounding suburbs and areas.
"Minneapolis is not an island," cautioned Council Member Michael Rainville, one of the four opposing the pay rules. "Ride-hailing customers often travel between Minneapolis and other parts of the state."
Update as of January 2026: Despite the initial threats, Uber and Lyft suspended operations briefly in July 2024 but resumed service later that month after the city agreed to suspend enforcement of the ordinance for one year to allow for negotiations. By 2025, a revised agreement was reached, ensuring the minimum wage standards while allowing the companies to continue operations. Today, ride-hailing services are fully available in Minneapolis, though riders may notice slightly higher fares to account for the driver pay requirements. This policy has improved conditions for drivers without disrupting service for travelers.
The policy fight in Minneapolis unfolded as worker movements seeking better pay and benefits gained steam nationwide in the gig economy’s snapshot delivery and transportation sectors.
Just a couple of years ago, gig workers for apps like DoorDash, Grubhub, and Amazon Flex in Massachusetts were granted access to benefits like minimum wage, overtime, and earned sick time under a groundbreaking state law.
The bold moves by Minneapolis leaders indicate a willingness to be at the vanguard of establishing portable worker protections and wages to match the 21st century’s rapidly-changing digital workforce. Seattle, New York City, and a few other municipalities have already started down this path with their ride-hail pay standards.
However, the blowback and threats from Uber and Lyft to abandon a major metropolitan market like Minneapolis altogether showed just how fiercely the companies dug in against any government intervention into their business models. Ultimately, the companies did not leave, and a state-level compromise was reached in 2024, ensuring continued operations while providing drivers with a minimum pay of $15.57 per hour.
Their future ability to classify drivers as independent contractors has been influenced by these battles, leading to broader discussions on worker classification nationwide.
With partisan gridlock in Washington D.C. leaving federal action on gig worker rights stalled, it’s increasingly fallen on local and state governments to hammer out these disruptive policies piecemeal. The Minneapolis City Council’s bold vote indicated the willingness of some leaders to be first-movers on this front despite the risks and pressures.
Uber and Lyft did not make good on their doomsday warnings of a Minneapolis shutdown. Surrounding suburbs and cities adapted, and the gig economy labor movement has continued to evolve. This saga provided key insights into similar fights across other states and cities in the years since.
And this ongoing evolution continues to shape the landscape. The high stakes Minnesota battle offered a window into broader reforms in the gig economy as of 2026.
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