Minneapolis Mayor Jacob Frey decided to veto the minimum wage bill for ride-hailing drivers working for Uber, Lyft, and other similar companies.

His decision was made after Uber and Lyft threatened the city that they would pull out their businesses if the ordinance was approved.

Minneapolis Mayor Vetoes Minimum Salary Bill

According to Fortune's latest report, Frey's decision is being criticized by a City Council member, saying that it is an "inexcusable betrayal of Minneapolis workers."

Although the minimum wage bill was rejected, Frey was able to negotiate an agreement with Uber to give drivers salary increases.

The deal will ensure that drivers picking up passengers in the city or driving within Minneapolis will have a wage of $15 an hour on average.

Aside from this, Uber also promised that drivers will a tip of at least $5 for any trip they make in the metro area.

Unfortunately, the deal was exclusive to Uber drivers. This means that riders working for Lyft and other ride-hailing companies are not included.

On Tuesday, Aug. 22, the Minneapolis mayor explained that they still need more time to get the new bill right.

"In the coming weeks, we will work in partnership with all stakeholders," he said via the Associated Press.

Frey stated that by working with stakeholders, they can put an ordinance that is data-driven and one that articulates policies based on proven impacts.

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Threats from Uber and Lyft

When the new minimum wage bill was introduced, Lyft and Uber warned the city council that they would stop operating in Minneapolis if it is implemented.

"Should this proposal become law, Lyft will be forced to cease operations in the City of Minneapolis on its effective date of January 1, 2024," said Lyft.

The ride-hailing company explained that the ordinance would be detrimental to drivers, claiming that it would lessen their earnings instead.

Lyft added that since prices will double, only wealthier passengers will be able to afford a ride.

The proposed ordinance was supposed to require Uber and Lyft to pay drivers $1.40 per mile and $0.51 per minute. However, officials clarified that this will only be applied for the portion of the ride inside the city.

As of writing, it is unclear if the vetoed bill be reconsidered once city officials improve it. For now, the best thing riders can do is to wait for further announcements.

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