MINNEAPOLIS (NEWSnet/AP) — Ride-hailing companies Uber and Lyft said they will delay their planned exit from Minneapolis after city officials decided Wednesday to postpone the start of a driver pay raise by two months.

The Minneapolis City Council voted unanimously to implement the ordinance on July 1 instead of May 1. Some council members said this gives other ride-hailing companies more time to establish themselves in the market before Uber and Lyft potentially leave, and it gives Minnesota lawmakers a chance to pass statewide rules on pay for ride-hailing drivers.

Under the ordinance, ride-hailing companies must pay drivers at least $1.40 per mile and $0.51 per minute — or $5 per ride, whichever is greater — excluding tips, for the time spent transporting passengers in Minneapolis.

The change aims to ensure companies pay drivers the equivalent of the city’s minimum wage of $15.57 per hour after accounting for gas and other expenses. However, a recent study commissioned by the Minnesota Department of Labor and Industry found that a lower rate of $0.89 per mile and $0.49 per minute would meet the $15.57 goal.

Uber and Lyft representatives say they can support the lower rate from the state’s study but not the city’s higher rate.

Uber says it would end operations in the entire Minneapolis-St. Paul metropolitan area — a seven-county region with 3.2 million people — while Lyft would only stop serving Minneapolis.

The companies previously pulled out of Austin, Texas, in 2016, after the city pushed for fingerprint-based background checks of drivers as a rider safety measure. The companies returned after the Texas Legislature overrode the local measure and passed a law implementing different rules statewide.

Follow NEWSnet on Facebook and X platform to get our headlines in your social feeds.

Copyright 2024 NEWSnet and The Associated Press. All rights reserved.