Why many Uber and Lyft drivers don’t come back

A carpool driver picks up passengers at O’Hare Airport on April 10, 2019 in Chicago, Illinois.
Scott Olson / Getty Images
After a dramatic drop in travel last year, people are on the move again. Yet despite offering cash incentives, ride-sharing giants Uber and Lyft are still struggling to get drivers back to full speed, resulting in longer wait times for customers and skyrocketing prices.
Uber and Lyft have invested millions in these efforts, but some former drivers aren’t even reviewing these stimulus packages or trying to get peak prices. A large percentage that still stands.
“The drivers are on a quiet strike,” Nicole Moore, a volunteer organizer for Rideshare Drivers United, told CNBC.
“Right now it’s a mini debacle for Uber and Lyft in terms of driver shortages and rising prices in the United States,” Wedbush’s Dan Ives said in an email. “The pilots are about 40% below their capacity. “
Former carpooling drivers stay off the road for a variety of reasons.
For many, it was the fear of the continuing pandemic that prompted them to stop driving in the first place. Currently, less than 50% of the U.S. population is fully vaccinated against Covid-19, according to data from the Centers for Disease Control and Prevention.
“This thing is not over yet, people can still get sick,” Louis Wu, a Texas resident and former carpool driver, told CNBC. According to Uber, 80% of drivers planned to return once vaccinated. The company has also invested heavily in getting people vaccinated, offering free trips to vaccination points until early July, as part of its efforts to get people back on the road.
Others, wanting to stay in the odd-job economy but fearing transmission, have switched to delivering food or groceries. It has also allowed them to reduce wear and tear on their cars, especially as the prices of gasoline and auto parts rise.
“In the days of Covid, there’s a lot less customer interaction with food delivery than carrying a passenger in the backseat,” said Harry Campbell, who runs the blog The Rideshare Guy, in a E-mail. “You also put fewer miles on your car as a delivery driver because people order at nearby restaurants compared to a full-time taxi driver who can easily drive 1,000 miles a week or more. dealing with people too. “
Some drivers also stayed on unemployment benefits, which are expected to expire later this year. For these former drivers, they may have to offer services after the extended benefits are canceled in the fall.
“September will be the big telltale sign if drivers hold on because of unemployment,” said Chris Gerace, driver and contributor to Campbell’s blog.
Better jobs
Uber and Lyft said they believe supply and demand issues will see a recovery in the third quarter, which began on July 1. However, if demand continues to outstrip supply, it could put pressure on ridesharing companies to make more fundamental changes to meet the needs of drivers.
Uber, for example, is considering funding education and career development programs, according to the Wall Street Journal. Lyft is also exploring ways to cut driver spending, according to the report released Friday.
But many conductors got a taste of what it’s like to work outside of the gig economy. Moore said she knew former drivers who have since taken office jobs or switched to tractor-trailer driving, with no plans to return.
Some concert workers are growing frustrated with the way the ride-sharing giants pay, especially as the price hike continues.
The Washington Post reported last month that despite the high fares passengers pay, drivers are not getting their fair share. And drivers have continued to call businesses, saying it’s increasingly difficult to live off apps, especially compared to the early days of businesses.
“When I started driving I was guaranteed 80% of the fare,” said Moore. “If that was where we were right now, you would see a very different equation on the road. Drivers sometimes see 20, 30, 40% of the fare.”
But it’s a question of whether ridesharing companies will listen and be open to fundamental changes, Gerace said.
The shortage also parallels Uber and Lyft’s promises to achieve profitability on an adjusted EBITDA basis by year-end, and pressure on the balance sheet could make that goal even more difficult.
“If these companies had a fundamental belief that would change the paradigm, you could have a good pay for the drivers, you could have good competitive rates and you could become profitable and have this win-win, but you have to take that initiative and be open to trying new things, ”said Gerace.
Uber declined to comment, pointing to an April blog post about its $ 250 million stimulus package. A spokesperson for Lyft pointed to comments by its chairman, John Zimmer, made in late May, saying the company was “extremely confident” in resuming supplies.