As a May 1st pullout deadline for Uber and Lyft approaches, drivers and startups try to adapt

Rideshare companies trying to enter Minneapolis face steep hurdles

Rideshare companies trying to enter Minneapolis face steep hurdles

For rideshare driver Matthew McGlory, the clock is ticking.

“It can be unsettling, it can be uncertain,” he said, while driving through the North Loop neighborhood in Minneapolis.

McGlory and other rideshare drivers are keeping close tabs on a May 1st deadline- when Uber and Lyft have threatened to leave the city.  

“I do have hope at the eleventh hour, all the stakeholders involved are going to come together,” he says.

McGlory, 39, has been a rideshare driver for seven-and-a-half years. He says he works between 40-50 hours a week and makes between $18-$20 an hour before taxes and expenses.  

McGlory says he feels he’s often making less than minimum wage.

With the uncertainty and pay concerns, he has a back-up plan: a new job as an assistant property manager.

But – he wants to keep driving part-time.
“If Lyft and Uber were to leave and if the driver co-op were to get implemented in our city,” he says, “I wouldn’t mind supplementing my income.”

So far, the City of Minneapolis says it’s received four applications for rideshare licenses, but it’s unknown where they are in the licensing process.

Some are asking for donations to help.

The city says it takes between two and six weeks to process those applications, depending on how complete they are.  

The fee is $37,145, plus a wheelchair surcharge.

In St. Paul, the license is $41,115.  

“Money can’t come out of thin air,” says John McVea, an economics professor at the University of St. Thomas.

McVea says the rideshare start-ups not only have to grapple with the driver pay issue.

He says launching a rideshare app can cost up to $200,000- and there’s more.

“The cost of developing revenue, the cost of insurance, the cost of data processing, mobile costs, and research and development,” he explains.

The rideshare companies are also required to submit a business plan.

The plan must include strategies for driver training, a substance use policy, vehicle inspections, and how the startup will list fares.

McVea believes in the end, Minneapolis city officials and Uber and Lyft will reach a deal for them to stay.

“I think this is a negotiation, I think it will be down to the wire,” he says. “It would be a huge black eye for Minneapolis, with tourism, and conferencing and its business reputation, to not be participating in a national rideshare business. Nobody wants to be downloading a different app when they fly into MSP airport.”  

McGlory says he’s trying to be optimistic.

“Uber and Lyft have only threatened to leave two cities comparable to ours- Austin, Texas and Seattle, Washington,” he declares. “They didn’t leave Seattle, they left Austin, and they came back after preemption was passed.”