A few weeks after receiving the second dose of a coronavirus vaccine, Debora Lima returned to an old routine: She pulled out her phone and requested an Uber ride so she could meet friends for dinner.
But instead of getting a ride within five minutes as she had expected, Uber surprised Mrs. Lima with a 19-minute wait and an expensive fare. It was not a one-time mistake. Mrs. Lima, a 28-year-old resident of Miami, planned to spend $ 100 a month on frequent Uber trips. Just two recent rides ate half of her monthly budget.
As the coronavirus pandemic seems to be retreating into the United States, and more people are returning to travel, socialize, and use ride-honoring apps, they find that these cheap and fast rides have become more expensive and not so readily available. Customers across the country say they are afraid of price jumps. In some cases, they say their Uber rides from airports costs as much as their airline tickets.
Uber and its biggest rival, Lift, acknowledge that prices are open and waiting times are longer, but they do not provide specific details. A recent analysis by research firm Rakuten Intelligence showed that the cost of a trip was 37 percent higher in March than a year ago. In April, costs rose by 40 percent.
Like many other industries, running clothes say prices have risen because they cannot find enough workers. But more than most other types of companies, Uber and Lyft can pass on the cost of finding these workers – in their case drivers treated as contractors – directly to their customers.
When there are not enough drivers to meet the demand, companies pay them more, sometimes they suggest so-called wave prices to lure drivers to areas where demand is high. Some recent increases have caused prices to jump 50 percent or more, said Daniel Ives, CEO of stock research at Wedbush Securities. Surge prices can be a boon for drivers, but they sometimes provoke rage from riders, especially during holidays and major events, when demand can send prices soaring.
“By organizing with the drivers as contractors, Uber and Lyft have, in a way, enabled the riders to hire these contractors,” said Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution. “Every time we open our Uber app, we may feel a little like the small business that can’t fill the vacancy after putting up the ‘Help Wanted’ sign.”
Uber and Lyft have poured money into extra incentives for drivers, such as cash bonuses to complete a certain number of rides. But the incentives do not seem to be as effective as they were before the pandemic. Some drivers said they are not back on the road because they are still afraid of getting sick.
Other financial incentives can also deter drivers. Although they would not normally receive unemployment insurance because they are categorized as independent contractors, Uber and Lyft drivers are entitled to pandemic unemployment funds under the CARES Act, easing the financial pressures that might have forced them to return. behind the wheel.
“We have given people a lot of fiscal support,” Edelberg said. “We have allowed people not to make these transitions in desperation, to prioritize their health, to prioritize their families. So it will take some time. ”
In an earnings report from early May, Uber said it had 3.5 million active drivers and couriers in the first three months of the year, which is 22 percent lower than the year before. “We have not seen the driver supply keep up with demand in the United States,” Dara Khosrowshahi, Uber’s CEO, said last week in JP Morgan Technology, Media and Communications Conference.
However, over the past four weeks, more than 100,000 more drivers have also returned to the platform, an Uber spokesman said. Uber has aggressively increased its incentive spending and put $ 250 million into efforts to recruit drivers and brand it as a “stimulus.”
Lyft also said it did not have enough drivers and spent a lot on recruiting them. In the first quarter of the year, the company spent $ 100 million on driver incentives, according to a earnings report.
“This is something we take extremely seriously, but something that we are very confident in, and I have already begun to see a significant movement on,” Lyft President John Zimmer said on JP Morgan conference. Lift saw a 25 percent increase in what it calls the driver “driver” – drivers interested in working for the platform – between late February and May, Zimmer said.
The incentives are starting to have an effect according to Gridwise, a service that helps concert workers track their earnings. Ride-hail earnings have steadily risen this year, rising to $ 25 an hour in May from $ 18 dollars an hour in January, Gridwise said.
The higher pay seems to be enough to tempt some drivers to return. While the number of drivers is still below pre-pandemic levels, Gridwise estimates that it is only 11 percent, an improvement from the 25 percent deficit in January. Uber also said that the total number of trips with sharp prices fell after a peak in March.
“When employers say they can’t find the workers they need, always add the phrase ‘to the wages I want to pay,'” said Heidi Shierholz, director of policy at the Economic Policy Institute. “We can attract workers – give them better jobs, better pay, better working conditions. It’s not rocket science; that’s how you do it.”
But customers are impatient to return to the fast, cheap rides. In Miami, Ms Lima said she had hoped the company would maintain low prices while trying to get more drivers back on the road. “Keep customers happy,” Ms Lima said. “At least with the price point.”
For now, she said, it’s impractical to use Uber, as she once did because of the price jump. Instead of an everyday utility, she said, Uber is likely to become a splurge item.
Cristine Sanchez, a hospitality worker in New York, used to pay about $ 20 for Uber rides to Brooklyn from Queens. Now the ticket price is around $ 38, she said, and a trip to the Bronx costs nearly $ 45.
Ms. Sanchez recently realized that airline tickets were almost the same price as her Uber rides. When she found a $ 60 return trip to Miami this month, she booked an impromptu trip with friends.
“If the choice is to go to the Bronx or go to Miami, I’m going to Miami,” said Mrs. Sanchez. “It’s like coming, Uber, come on, Lift, let’s get it together.”