Around this time last year, Uber and Lyft saw the demand for their flagship service, because the fear of the coronavirus keeps most people at home. By May 2020, Uber’s ride bookings had dropped by 80 percent a year earlier.
But now, as people are vaccinated and some states relax public health restrictions, the demand for rides increases. And Uber and Lyft are struggling to recruit enough drivers to meet their needs.
“It takes forever to get an Uber now,” a man outside Boston’s Fenway Park told local NBC 10 television station. Another man who had just completed an Uber trip to Fenway said he waited 16 minutes for his driver to arrive.
Uber increases recruitment
It is not surprising that drivers have a shortage. The risks of catching COVID have not disappeared, and therefore people still take a health risk when driving their passengers. At the same time, the economy is bouncing back, bolstered by last year’s high savings rates and huge stimulus spending. Many people who worked as Uber or Lyft drivers in early 2020 moved to other positions.
More fundamentally, it takes time and effort to recruit drivers. Uber and Lyft spent billions of dollars building their pool drivers in the first place.
Uber says that drivers due to a shortage of drivers can now earn much more money than before the pandemic. One of the highest paid cities is Philadelphia, where Uber says drivers earn an average of $ 31 an hour. Other high-paying cities include Chicago (nearly $ 29 / hour), Miami and Phoenix (both about $ 26 / hour).
These figures include the time drivers wait between rides, but do not include expenses, which according to Uber average about $ 4 per hour.
Uber on Wednesday planned to further sweeten the pot by offering drivers incentives worth $ 250 million.
Some regions have specific challenges
Although high-priced companies have a shortage across the country, some regions have been hit particularly hard. Boston is one of them. Uber says riders in Boston area have particularly long waiting times because Gov. Charlie Baker has declared a state of emergency that effectively bans Uber from using the prices of boom. Pricing helps to balance supply and demand, not only by paying drivers more, but also by encouraging riders to wait or adopt alternative forms of transportation.
Meanwhile, Uber in California says it is reconsidering features that allow drivers in the Golden State to see ride destinations and determine their own prices. The changes were adopted early last year as part of Uber’s effort to convince the courts that its executives were independent contractors rather than employees. But Uber recently told the San Francisco Chronicle that the system does not work well – that drivers choose the most profitable rides and take the rest. This exacerbates the already bad user experience created by the driver shortage, as it means customers with less profitable rides struggle to fit in with a driver.