Uber and other ride-hailing companies in their home markets are turning to a new method of getting around: a driver’s fee.
The companies say their new fares are actually cheaper than what they charge drivers in New York and Los Angeles.
The fees, which have been approved by city officials, come as ride-sharing firms struggle to get the federal government to crack down on their illegal practices.
Uber, Lyft and other companies in the industry said they were taking the extra cost of their rides out of the equation as part of a new agreement with the city of Duluth, Minn.
It comes after a new report revealed that more than 10 percent of drivers surveyed in Minnesota are being charged more than $1,500 per month.
Uber said in a statement that it has been working with Duluth officials to find a better solution, and said that it would be announcing the agreement this month.
Uber declined to say how much it would pay for drivers in Duluth.
The Duluth City Council approved a measure last month to require drivers to have a valid driver’s license and pass a drug test, but the legislation was blocked by a state judge who said it did not go far enough to protect drivers.
Uber and a few other companies have sued to stop the new law from going into effect.
The state’s attorney general has also been working to block the measure.
The new fee structure would give drivers a higher incentive to show up and pay their fair share, according to an Uber statement.
Uber will use the new rates to reimburse the driver for any fare difference, Uber said.
The city of Minneapolis will use a lower rate to reimburse drivers who pay less than $15.
The cities said that Uber and its competitors, Lyft, are making the same mistakes that caused the rise in drug use in their cities.
The new fees, however, will likely have little effect on drivers who use ride-share services for work or personal purposes.