The Ways the Pandemic Have Reshaped Uber and Lyft

Wait times are longer and prices are higher as drivers increasingly wonder why they should work long hours for uncertain income when they can make $17 per hour plus bonuses and overtime at Amazon. 

The longer term strategic question is whether the ride hail companies are going to lose their reputational and financial advantage to traditional taxis. JL

Faiz Siddiqui reports in the Washington Post:

The companies prioritized convenience and cost, dangling bonus incentives and rider discounts to ensure a driver was always around and prices were competitive. But now drivers are staying home out of lingering fear over the pandemic and concern that demand is down. That is leading to ballooning prices, longer wait times. Uber and Lyft, for their part, are confident drivers will eventually return to the streets. For now, the companies are yet another example of how the pandemic has remade parts of daily life we have otherwise taken for granted.

To get a sense of how the pandemic has reshaped vast segments of the workforce, just pay attention the next time you try to hail an Uber.

Uber — you remember it, right? That icon collecting dust somewhere in your phone — the app you used to tap to grab a quick ride to the grocery store, out to dinner or maybe to a medical appointment? Gosh, was it always this expensive? And why does it seem like the driver is always 10 minutes away?

The Post’s Heather Long has written about “a great reassessment of work in America.” And more recently, The Post’s Abha Bhattarai covered an exodus from retail, as workers ditch low-paying jobs for less-stressful positions, more flexible work or even to go back to school and learn new trades. Meanwhile, a similar dynamic is playing out in the gig economy, which has been dogged for years by complaints of low pay, stressful conditions and allegations of exploitation of its massive contract workforce. In this new environment, even the promise of better pay has been insufficient to draw drivers back.

Uber CEO Dara Khosrowshahi recently said median earnings in New York and Philadelphia were $37 an hour, well over what drivers might typically collect. 

“What the folks that are complaining they want to see: they want to see things like minimum wage, higher per mileage rates, longer lasting structural change,” said Harry Campbell, founder of the blog the Rideshare Guy, which writes about the gig economy and serves as a resource for drivers. “They’re worried this is a short-term bump.”

In this file photo the Uber logo is seen on a car in Washington, D.C. (Photo by Alastair Pike / AFP)

The steep supply shortages on the heels of the pandemic present a unique challenge in the decade-long history of Uber and Lyft. 

The companies have prioritized convenience and cost, dangling bonus incentives and rider discounts to ensure a driver was always around the corner and prices were competitive. But now drivers, the companies say, are staying home out of lingering fear over the pandemic and concern that demand is down. That is sometimes leading to ballooning prices, longer wait times and a diminished experience for users of the apps, with few signs of relief.

Company executives and gig economy experts also attribute the situation to drivers continuing to collect unemployment and other government assistance rather than returning to often-stressful and low-earning work; The Post reported in March that “Uber” and “Lyft” were the two most common business names reflected in certain government grant and loan programs established to help small businesses weather severe economic disruptions. That could open a relief valve as those types of assistance phase out with the larger reopening of the economy this summer and fall.

But in May, some drivers told The Post they were likely done for good, after the coronavirus pandemic provided the first glimpse at what life after Uber could look like. And there was added frustration in April when Uber dialed back features aimed at providing independence for drivers in California and uncoupled driver earnings from passenger fares. That meant some drivers who might collect an astronomical payout on a long ride would only receive a small, predetermined bonus from the company — another way they saw Uber clawing back money from them.

Khosrowshahi pushed back in a Twitter thread, arguing that the share of driver pay compared to passenger spending was higher after the changes.

Meanwhile Uber and Lyft, for their part, are confident drivers will eventually return to the streets. For now, the companies are yet another example of how the pandemic has remade parts of daily life we have otherwise taken for granted.