A few weeks after receiving the second dose of coronavirus vaccine, Debora Lima returned to an old routine: she pulled out her phone and requested a ride with Uber so she could meet friends for dinner.
But instead of getting a ride within five minutes as she expected, Uber surprised Lima with a 19-minute wait and an expensive price tag. This was not a one-time mistake. Me. Lima, a 28-year-old Miami resident, planned to spend $ 100 a month on regular Uber trips. Only two recent rides have eaten up half of her monthly budget.
As the coronavirus pandemic in the United States appears to be weakening and more people are returning to travel, visiting and using driving apps, they are discovering that the cheap and fast rides have become more expensive and not as readily available. Customers across the country say they were shocked by the price increases. In some cases, they drive Uber from airports as much as their plane tickets cost.
Uber and its leading competitor, Lyft, admit that prices are higher and the waiting time is longer, but that does not give details. A recent analysis by research firm Rakuten Intelligence found that the cost of a ride in March was 37 percent higher than a year ago. In April, costs rose by 40 percent.
Like many other industries, the outfits that boast say that prices are higher because they can not get enough workers. But more than most other types of companies, Uber and Lyft can bear the cost of finding workers – in their case managers treated as contractors – directly to their customers.
If there are not enough managers to meet the demand, the companies pay them more, and sometimes use the so-called training prices to attract managers to areas where the demand is high. Some recent rises have pushed prices up 50 percent or more, said Daniel Ives, managing director of equities research at Wedbush Securities. Pricing can be a boon for drivers, but it sometimes causes outrage from riders, especially during holidays and big events when demand can cause prices to rise.
“By organizing Uber and Lyft with the managers as contractors, they have, in a sense, put the managers in a position to employ these contractors,” said Wendy Edelberg, director of the Hamilton project and a senior fellow at the Brookings Institution, said. “Every time we open our Uber app, we may feel just like the small business that can’t fill the vacancy after putting up ‘Help Wanted’ sign.”
Uber and Lyft have poured money into extra incentives for drivers, such as cash bonuses for completing a certain number of rides. But the incentives do not seem as effective as before the pandemic. Some drivers said they are not on their way again because they are still afraid of getting sick.
Other financial incentives can also deter the drivers. Although they do not normally get unemployment insurance because they are classified as independent contractors, managers of Uber and Lyft are eligible for unemployment support funds under the CARES Act, which eases the financial pressure that would otherwise have forced them to get behind the wheel again. sit.
“We have given people a lot of fiscal support,” she said. Edelberg said. ‘We have allowed people not to make these transitions in desperation, to prioritize their health and to prioritize their families. So it’s going to take a while. ”
In an early May earnings report, Uber said it had 3.5 million active drivers and couriers during the first three months of the year, down 22 percent from the previous year. “We have not yet seen the supply of drivers keep pace with US demand growth,” Uber CEO Dara Khosrowshahi said in May at the JP Morgan Technology, Media and Communications Conference.
11 June 2021, 13:46 ET
In May, however, more than 100,000 drivers also returned to the platform, an Uber spokesman said. Uber has aggressively increased its incentive spending, with $ 250 million in an effort to recruit drivers and brand it a brand “Stimulus.”
Lyft also said he does not have enough drivers and that he spends 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.
“It’s something we take very seriously, but it’s something we’m very confident about, and I’m already starting to see a big move,” said Lyft President John Zimmer. JP Morgan conference. Lyft said Lyft saw a 25 percent increase in what he calls’ drivers’ leads’ – drivers interested in working for the platform – between late February and May, Mr. Zimmer said.
The incentives start according to Gridwise, a service that helps gig workers track their earnings. Earnings for the ride rose steadily this year, rising in May to $ 25 an hour from $ 18 an hour in January, Gridwise said.
The higher salary seems to be enough to tempt some managers to return. While the number of drivers is still below prepandemic levels, Gridwise estimates that it is only 11 percent lower, an improvement from the 25 percent deficit in January. Uber also said that the overall number of trips with rising prices is declining to a peak in March.
“When employers say they can’t get the workers they need, you always have to add the phrase, ‘against the wages I want to pay,'” said Heidi Shierholz, policy director at the Economic Policy Institute. “We know how to attract workers – better jobs, better salaries and better working conditions. This is not rocket science; so you do it. ”
But customers are impatient to return to the fast, cheap rides. In Miami, it’s me. Lima said she hoped the company would maintain low prices while trying to get more drivers on the road. “Keep customers happy,” she said. Lima said. “At least with the price point.”
For now, it is impractical to use Uber as she did earlier due to the price jump, she said. Instead of an everyday utility, she said, Uber is likely to become a luxury item.
Cristine Sanchez, a hospitality worker in New York, previously paid about $ 20 for Uber rides to Brooklyn from Queens. The fare is now about $ 38, she said, and a trip to the Bronx costs nearly $ 45.
Me. Sanchez recently realized that airfare was almost the same price as her Uber rides. When she recently found a $ 60 return flight to Miami, she booked an impromptu trip with friends.
“If the choice goes to the Bronx or to Miami, I’m going to Miami,” she said. Sanchez said. “It’s like come, Uber, come, Lyft, let’s get it together.”