Uber does not want a legal minimum wage for its drivers in the city of Minneapolis. A new law passed by the City Council would increase driver pay, but Uber opted out, accusing the city of putting drivers out of work.
In the United States, the city council of the city of Minneapolis has decided to introduce legislation on minimum wages for VTC drivers. By a vote of 3 to 10, the city council of Minnesota’s largest city decided to guarantee them at least $1.40 per mile (1.6 km) traveled and $0.51 per minute spent with a passenger. Thus, the salary of Uber drivers is increasing.
Uber doesn’t want a minimum wage for its Minneapolis drivers
It didn’t take long for Uber to react. In a press release, the operator of food delivery app Uber Eats alleges: “We are disappointed that the council chose to ignore the data and drive Uber out of Minneapolis, putting 10,000 people out of work and putting many more in harm’s way.”
In the United States, the legal minimum set by the federal government is $7.25. However, local elected officials have the freedom to raise them, which is the case in most states and municipalities. Thus in the city of Minneapolis, the legal minimum wage is $15.73 an hour.
A report commissioned by the state of Minnesota suggested that the best solution for VTC drivers to achieve remuneration equivalent to this legal minimum, without changing their legal status, was to implement these two measures: per mile and per mile. Remuneration per minute. Obviously, Uber’s economic model does not support such a level of remuneration.
Uber only offers access to the largest markets
Munch prefers to take away rather than give in the municipality. This would have set a precedent that could tempt other local elected officials to implement similar laws, not just in the United States but in all countries where Uber operates.
Read > Here are the cities where Uber gives its customers the worst ratings
Minneapolis is only a small market for Uber, the company can afford it. In France, the company chose to embrace the drivers’ union by increasing driver wages, which could result in more expensive rides. She would have been obliged to do so in any case by European legislation on so-called “casual” workers which should come in soon.
This is another hard blow for the platform. In November, a New York judge fined Uber $290 million. The investigation specifically targeted the platform over its pay practices. Meanwhile, Uber launched a feature to measure its environmental impact…
- Uber no longer operates in the city of Minneapolis due to laws regarding VTC driver pay.
- With remuneration in time and distance, drivers could have claimed the equivalent of the legal minimum.
- To avoid setting a precedent, VTC does not want to give the platform to municipalities.
Source: Reuters
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