Uber and Lyft dole out cash to get drivers back on the road
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During the COVID-19 pandemic, many drivers turned off their Lyft and Uber apps because they were worried about catching COVID-19. That, or there just weren’t enough rides to make it worth their while.
Now those ride-hail companies are saying they have a driver shortage.
Both announced this week a “stimulus” they hope will get drivers to log back in and quash long wait times some riders are experiencing. Uber said it was spending $250 million to make that happen.
One long-time ride-hail driver in Austin, Texas, said Lyft is giving him $300 extra to give 20 trips this week and Uber gave him $100 just for giving three rides.
Harry Campbell, founder of the website The Rideshare Guy, said monetary incentives are a key part of the playbook.
“When I, myself, first signed up to drive for Uber in 2014, they gave me a $500 bonus payment after just one ride, my first ride,” he said. But drivers should recognize that these incentives are a short-term deal and could, in the long run, end up hurting their earnings. “In a weird way, the more these companies pay, the more bonuses they offer, the more drivers they get onto the road, the more flooded the streets are with Uber and Lyft drivers, and then that actually brings down your average earnings as a driver.”
Campbell said as long as drivers are classified as independent contractors and not employees, the companies are fine with that. The drivers, facing stiffer competition, not so much.
It’s also not certain that the incentives will get more drivers on the road. Many gig workers still fear for their health as they drive passengers around, and some have found other ways to make ends meet.
“Our data shows that driver activity is actually slightly decreasing,” said Brandon Sellers, head of marketing at the ride-hail analytics company Gridwise. “A lot of that has to do with you have actual stimulus checks and some drivers are still able to get unemployment.”
He said a lot of drivers think it’s safer to do grocery and food delivery, so it’s not yet worth it to get back to driving people around.
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