Where’s The Money?
By Mitch Berg
The Minneapolis City Council’s vote on minimum wages for independent contractor drivers has driven Lyft out of Minneapolis, and Uber out of both cities.
A friend of the blog emails with an initial reaction very close to my own:
The Minneapolis City Council doesn’t actually understand a lot. They want affordable options, but they want people to be paid high wages. It doesn’t always work that way.http://apnews.com/article/minneapolis-uber-lyft-ridehailing-minimum-wage-d60db6a2e2580dc1d93c438a8cffa5ee
That being said, Uber and Lyft were never affordable here in the Twin Cities like they are elsewhere. That is likely because the market here doesn’t support it like it might in cities with higher density populations.
This article mentions that “Seattle and New York City have passed similar policies in recent years that increase wages for ride-hailing drivers, and Uber and Lyft still operate in those cities.”
Yes, well, the cost to use those services was lower to start with because they actually could make money there. So, they are likely still making money even if passengers are paying more to ride. I would bet those services were barely making it here as it was. It’s not hard to drive most places, it’s not even particularly expensive. The downtowns of MSP are mostly dead anyway, so who is using Lyft and Uber at this stage anymore? As far as I can tell, the council’s stupid ordinance just gave them the excuse to pull out.
That was pretty much what I thought; it was yet another case of a prog city council demanding the world violate the laws of economics to give them what they want.
But wait. There’s more.
It’s the current DFL – so one must always check to see if there’s an ulterior motive involving transferring wealth from taxpayers to the DFL’s non-profit/government complex.
And of course there is:
There you go – Soviet-style ride sharing.
Because the DSA needs to make sure they get a cut of all that ride-share money.
March 15th, 2024 at 11:03 am
You call for a ride from the bar because you’re hammered and they send a state trooper to pick you up
how is it different than we have now
March 15th, 2024 at 12:13 pm
Soviet style? So it’ll be Lyft, but using Ladas and Trabants?
Seriously, I’m glad to see that the DFL has solved all of the other problems this state has, and can turn its attention to compete with (somewhat) free market cabbies.
March 15th, 2024 at 12:46 pm
Tell me again how Trump was a fascist?
March 15th, 2024 at 1:27 pm
I just reserved an Uber ride from a suburb to the airport for next Tuesday. $36 one way, mid-afternoon, cheapest ride. I generally add a tip because I figure they need it and if I can afford an airplane ticket, I can afford a tip for the guy who got me there, so let’s call this a $50 trip. I’ll pay at least as much when I return, probably more, if there’s an airport surcharge.
I have no idea how much the Uber driver makes but if the trip cost much more I’d be calling friends for a ride and then he’d make nothing at all. Would Minneapolis like that result better?
March 15th, 2024 at 1:57 pm
I have no idea how much the Uber driver makes
It varies based on a bunch of different factors, but if there is no surge, 30-40% of base fare is a decent estimate.
When I drove, I received a tip from maybe 5% or fewer of riders. Travis Kalanick’s initial stance of “you don’t need to tip your drivers because they make so much” poisoned the marketplace. This lasted years after Uber was sued, lost, and had to change their policies to allow tipping and build the function into the app. My last time driving was the weekend before Walz locked down the state for COVID.
Uber jimmied their driver compensation policies enough the last year that I drove, that it became very hard to make it worth my time to continue driving. My rule of thumb was “If I didn’t gross an average of $20/hr including tips and before expenses, across the whole night/weekend I drove, it wasn’t worth it.” Towards the end, those nights/weekends started happening more frequently.
March 15th, 2024 at 2:03 pm
One more question:
Lyft and Uber say they will leave Minneapolis after city council forces them to pay drivers more
The measure requires ride-hailing companies to pay drivers at least $1.40 per mile and $0.51 per minute for the time spent transporting a rider — or $5 per ride, whichever is greater — excluding tips. In the event of a multi-city trip, that only applies to the portion that takes place within Minneapolis.
So they’re “leaving Minneapolis”. Does this mean they will no longer provide rider services for only trips originating within the bounds of the city of Minneapolis, but as long as you’re outside city limits you’re good? Or does it mean “the Minneapolis Market Area” which encompasses most of the 12 county metro area?
March 15th, 2024 at 2:07 pm
BillC
I heard some discussion about this same thing this morning. Neither Uber nor Lyft have officially answered, but the general consensus seems to be that they won’t operate inside the city limits of Minneapolis.
March 15th, 2024 at 4:49 pm
That oughta be interesting for those coming into Mpls from outside of Mpls. Especially business travelers heading downtown.
https://giphy.com/gifs/michael-jackson-comments-popcorn-pUeXcg80cO8I8
March 15th, 2024 at 5:10 pm
BH, I just saw this:
https://www.cbsnews.com/minnesota/news/minneapolis-city-council-set-to-vote-on-overriding-mayor-freys-rideshare-ordinance-veto/
“MINNEAPOLIS — It took just a few minutes for the Minneapolis City Council to override the mayor’s veto, and confirm a pay boost for rideshare drivers.
Uber and Lyft said that means they’ll soon stop offering rides not just in Minneapolis, but the entire metro.
The council voted 10-3 in favor of the override. Mayor Jacob Frey says the ordinance passed last week by council members in a 9-4 vote was “dramatically off.”
“Today’s vote showed Uber and Lyft and the mayor that the Minneapolis city council will not allow the East African community or any other community to be exploited by cheap labor,” said Jamal Osman, a councilmember who co-authored the policy.
The ordinance means Uber and Lyft would have to pay drivers minimum wage, more than $15 an hour.
After the vote, Uber immediately released a statement saying they would stop service in the entire metro area on May 1. That includes the airport.”
And the taxi drivers cheered!
March 16th, 2024 at 7:30 am
A few years before we left MN, the city of St. Paul divided the city into garbage hauling districts and awarded the hauling contracts to their favored haulers ( Being cynical, I surmised that money was at root) I thought that this was a prelude to the city taking over garbage hauling sometime in the future and what do you know!!!! Now I am seeing moves by the council that this is taking place. Nothing outside of the state, all within the state