It is becoming more and more costly for people to hail a ride. With ride-share services such as Lyft and Uber combating driver deficits, there is a 40% increase in ride prices nationwide, as per Rakuten’s data. The sudden increase is affecting big cities, especially LA, Chicago, and NYC.
As for industry analysts, as the economy bounces back as well as hospitality and travel industries see more demand, more customers are again turning to ride-hailing applications at higher prices. For instance, Rakuten Intelligence’s analyst David Gill said that it is a typical example of the relationship between demand and supply. As for Gill, when events, restaurants, and activities are resuming, individuals are looking for ride-sharing solutions at a level that did not exist before the epidemic.
On the other hand, drivers have looked for other avenues to do temporary work to keep afloat in the slow epidemic period. When this epidemic was at its peak, several drivers faced unstable earnings. Because of demand issues, one of them even made $2.5 per hour, which according to Business Inside is about $198 less than what he was earning before the epidemic.
Many drivers turned their focus to other temporary work in the period to continue to have funds floating in when shared rides were badly affected. Those rides have not gone back to the volume required for them to keep pace with the latest demand. Gill also stated that because ride-sharing service providers are encouraging new drivers with incentives, this would even out, albeit it takes even months to reach there.
Earlier this year, Uber announced its plan to launch a stimulus of $250 million to make driver earnings better to incentivize them amid their deficits. The company stated that the stimulus would go to not just those who start to drive again but also new drivers.
At the same time, Lyft is paying attention to boosting its driver count to satisfy the greater demand. In its recent earnings call, the company also noted that 25% more drivers are undergoing the new recruitment process for it as compared to February this year.