Uber and Lyft Ride Prices Soar: Why You Need to Pay More

A few weeks after receiving the second dose of coronavirus vaccine, Deboralima returned to its old routine. She unplugged the phone Uber Ride so she can meet her friends for dinner.

But instead of getting on in less than five minutes, Uber surprised Lima with a 19-minute wait and high fares. It wasn’t a one-time glitch. 28-year-old Lima, who lives in Miami, planned to spend $ 100 a month on frequent Uber trips. Two recent rides have exhausted half of her monthly budget.

As Coronavirus pandemic Looks like it’s retreating In the United States And as more people return to travel, socializing, and using ride hailing apps, they find that those cheap and fast rides become more expensive and not so easily available. Customers across the country say they are surprised by the soaring prices.In some cases, they say Uber is boarding from the airport It costs about the same as an airplane ticket..

Uber and its top rival Lyft admit that prices are rising and waiting times are longer, but they don’t provide details. According to a recent analysis by research firm Rakuten Intelligence, fare in March was 37% higher than it was a year ago. April costs increased by 40%.

favorite Many other industriesThe ride-hailing service costumes are said to be rising in price because they can’t find enough workers.But with Uber more than most other types of companies lift You can pass the cost of finding those workers (in their case, the driver treated as a contractor) directly to the customer.

If there are not enough drivers to meet the demand, companies may rely on so-called surge pricing to pay more drivers and seduce them to high-demand areas. Daniel Ives, managing director of equity research at Wedbush Securities, said prices have risen by more than 50% due to the recent surge. Soaring pricing can benefit drivers, but it can also cause anger from riders, especially during holidays and large-scale events where demand can drive prices up.

Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution, said: “Every time you open the Uber app, you may feel like a small business that can’t fill vacant seats after you’ve put up a” help request “sign. “

Uber and Lyft have invested money in additional incentives for drivers, such as cash bonuses to complete a certain number of rides. However, incentives do not seem to be as effective as they were before the pandemic. Some drivers say they haven’t returned to the road because they’re still afraid of getting sick.

Other financial incentives can also discourage drivers.Uber and Lyft drivers do not usually take out unemployment insurance because they are classified as independent contractors. Pandemic Unemployment Support Fund Under the CARES Act, it relieves financial pressure that would otherwise have forced them to grab the steering wheel.

“We have provided a lot of financial support to people,” Edelberg said. “We have allowed people to avoid these transitions desperately, to prioritize their health and to prioritize their families, so it will take some time.”

Uber said in a earnings report in early May 3.5 million active drivers and courier The first three months of the year were down 22% from the previous year. Uber CEO Dara Khosrowshahi said in May: JP Morgan Technology, Media, Communication Conference..

But in May, more than 100,000 more drivers returned to the platform, a Uber spokeswoman said. Uber aggressively increased incentive spending and spent $ 250 million to recruit and brand drivers. “Stimulation.”

Lyft also said he spends a lot of money hiring drivers because he doesn’t have enough drivers. In the first quarter of this year, the company spent $ 100 million on driver incentives, according to revenue reports.

“This is something we take very seriously, but we are very confident and we are already starting to see big moves,” said Lyft President John Zimmer. It states that. JP Morgan Meeting. Lyft said that from late February to May, what was called a driver’s “lead” (a driver interested in working on the platform) increased by 25%, Zimmer said.

According to, incentives are starting to take effect Gridwise, A service that helps gig workers track their income. Ridehaling revenues have steadily increased this year, rising from $ 18 an hour in January to $ 25 an hour in May, according to Gridwise.

The higher salary seems to be enough to seduce some drivers to come back. The number of drivers is still below the pre-pandemic level, but Gridwise estimates that it is down only 11%, up from the 25% deficit in January. Uber also said the total number of soaring-priced trips has declined after its peak in March.

“Whenever an employer says he can’t find the worker he needs, add the phrase” at the wages I want to pay, “” said Heidi Seal, director of policy at the Institute for Economic Policy. Holtz says. “We know how to attract workers — give them better jobs, better wages, better working conditions. It’s not rocket science. That’s your way.”

But customers can’t wait to return to fast, cheap vehicles. In Miami, Lima said the company wanted to keep prices low while the company was trying to get more drivers back on the road. “Keep your customers happy,” Lima said. “At least for the price.”

For now, she said it’s not feasible to use Uber as it used to be, due to soaring prices. Instead of everyday utilities, she said Uber is likely to be a luxury item.

New York hospitality worker Christine Sanchez paid about $ 20 for an Uber ride from Queens to Brooklyn. The current fare is about $ 38 and the cost of a trip to Bronx is about $ 45.

Sanchez recently noticed that airfares are about the same as her Uber rides. When she recently found a $ 60 round-trip flight to Miami, she booked an instant trip with a friend.

“If you choose to go to Bronx or Miami, I’ll go to Miami,” Sanchez said. “Come on, Uber, come on, Lyft, let’s do it together.”

Uber and Lyft Ride Prices Soar: Why You Need to Pay More

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