AMNA NAWAZ: The latest front line in the battle over fair pay for rideshare drivers is in Minneapolis.

Uber and Lyft have threatened to leave the city over a new ordinance that sets minimum wages for drivers.

As special correspondent Fred de Sam Lazaro reports, it's leading to bigger questions about the state of the gig economy.

FRED DE SAM LAZARO: Lifelong Minneapolis resident Matthew McGlory started driving for uber and Lyft over seven years ago.

He loves the flexibility, the chance to meet new people, and for a while he felt like drivers and the companies were true partners.

But in the past few years, McGlory says drivers have seen a smaller cut of fares.

MATTHEW MCGLORY, Rideshare Driver: Is it fair that Lyft or Uber will charge a passenger $67 and give the driver $23?

We're not asking for anything more than we think we deserve or anything more than we think is fair.

FRED DE SAM LAZARO: That's why McGlory supported a recent Minneapolis city council ordinance that sets minimum pay for rideshare drivers.

It requires the companies to pay drivers at least $1.40 per mile and $0.51 per minute during rides.

ROBIN WONSLEY, Minneapolis, Minnesota, Councilmember: This fight is really simple.

It's about giving workers a minimum wage.

FRED DE SAM LAZARO: Councilmember Robin Wonsley helped write the policy.

ROBIN WONSLEY: We hold the standard that workers should earn livable wages.

We should not make exemptions for rideshare drivers because they're part of the gig economy.

This is the time to reevaluate our dependence on two corporate giants that have based their entire economic model on paying their drivers sub-minimum wages.

Immediately after the ordinance passed, both Uber and Lyft said they would stop operating in Minneapolis on May 1, the day the increases take effect.

Uber spokesman Josh Gold.

JOSH GOLD, Spokesperson, Uber: What we saw in other markets is, if you raise rates too high, you may be making more for each individual trip.

Because demand's going to go down, you will actually be making less on an hourly basis.

FRED DE SAM LAZARO: Are you really going to leave on May 1 if this doesn't change?

JOSH GOLD: Yes.

FRED DE SAM LAZARO: Gold pointed to the company's decision to leave Austin, Texas, in 2016 after that city passed a driver fingerprinting requirement.

It only returned when the state passed a law preempting the city.

But Uber and Lyft have backed down from threats to leave elsewhere.

JOSH GOLD: I really hope we can continue to work with drivers and policymakers in Minneapolis to continue to stay.

But if it doesn't make sense to operate a business, we won't operate a business.

FRED DE SAM LAZARO: The day after Minneapolis passed its ordinance, the state released a study of the rideshare industry.

It found Minnesota drivers are mostly Black male immigrants, many living in low-income households.

The study also found that drivers would make the equivalent of minimum wage in Minneapolis, plus car expenses, if they were paid 89 cents per mile and 49 cents per minute.

Those rates are lower than the city ordinance, but driver pay would still increase about 10 percent.

And at those levels, Uber and Lyft say they could stay in the market.

On a recent afternoon near Minneapolis-Saint Paul Airport, drivers waiting for customers expressed mixed feelings.

MAN: In order to keep the job, in order to keep the companies in the city, we need something they're happy and we're happy between the study and the city.

MAN: I don't think the rates that Minneapolis is giving worth Uber leaving.

No, I don't think so.

If they can work something out, fine, but I don't think it's worth Uber leaving.

FRED DE SAM LAZARO: Ninety-five percent of all Minnesota rideshare trips begin in the Twin Cities, so a departure from the metropolitan Minneapolis-Saint Paul area would effectively end the app's presence in the state.

And that's prompted concern among policymakers on both sides of the aisle.

Lawmakers are trying to finalize legislation before May 1 that would both satisfy drivers and keep the companies operating here.

Meanwhile, the Minneapolis City Council has said it may reconsider its ordinance as soon as this week.

But no matter what happens, the situation in Minnesota is being watched closely, says Cornell University's Andrew Wolf.

ANDREW WOLF, Cornell University: What Uber and Lyft are doing in Minneapolis is not new.

There are pushes in other cities, and I think Minneapolis is kind of a perfect place for them to make a stink, because it is a big - - bigger city where this would have an impact, but it's not such a big city that it would really impact their bottom line.

They are trying to make a big show out of Minneapolis in order to try to stop these other efforts from moving forward.

FRED DE SAM LAZARO: If Uber and Lyft do leave, other rideshare companies have vowed to fill the gap.

But until then, drivers like Matthew McGlory are weighing their options.

He's starting a job with a property management company this week.

MATTHEW MCGLORY: Drivers aren't leaving.

The cars that we drive aren't going anywhere, right?

They're saying they want to leave.

Is that really done in the spirit of true partnership?

FRED DE SAM LAZARO: For the "PBS NewsHour," I'm Fred de Sam Lazaro in the Twin Cities.

AMNA NAWAZ: Fred's reporting is a partnership with the Under-Told Stories Project at the University of St. Thomas in Minnesota.