Uber and Lyft suffer driver shortages. With the number of drivers in the United States for both apps down about 40 percent, both companies pledged to spend hundreds of millions of dollars to lure people back into the driver’s seat.
Uber announced Wednesday that it had launched a $ 250 million “stimulus” for drivers, hoping to return to the platform faster.
“In 2020, many drivers quit driving because they can’t count enough trips to make it worth their time,” wrote Dennis Cinelli, vice president of mobility for Uber in the United States and Canada. The post “In 2021, more drivers are requesting trips than drivers are available, making it a great time to be a driver.”
Meanwhile, Lyft covered car rentals by offering a $ 800 bonus to drivers to return to the app and pay the driver extra bucks when the ride is longer than nine minutes, according to the report. Economic condition.
The hope is that these incentives can help persuade drivers to leave the system after ultimately frustrated by the absence of their drivers. The major challenge, though, is that COVID-19 is still a big driver of Uber and Lyft’s businesses.
Due to the increase in the number of cases during the winter, the two companies lost most of their customer base. People are at home or when they are out and about, they choose not to use bus calling apps. In the last quarter of 2020, Uber said it had “just 93 million monthly active consumers of the platform,” a term for users who took at least one Uber ride or bought at least one meal in Uber Eats, which is 16 percent off. Yearly percentage. Meanwhile, Lyft reported a 45 percent drop in monthly active users, from 22 million in the fourth quarter of 2019 to 12.5 million in 2020.
Uber claims demand is “coming back,” although we won’t know how much until the company first reports earnings for 2021.It appears to be the reason that vaccination rates continue to rise and people will start using Uber and Lyft. But it will depend on a number of factors, including opening a new office, returning to leisure activities, recovering from business travel, and people returning to their daily lives.
According to Apptopia, the number of U.S. drivers who signed into Uber in the first three months of 2021 fell 37.5 percent year over year, Lyft was down 42.3 percent over the same period.
Last year, both companies focused on cutting costs, and that often means actively restricting driver supply. In its latest earnings report, Lyft said it had to block new drivers from joining the app in certain markets while reducing marketing spending and other incentives. “The acquisition of drivers and incentive spending is positive for our financial results,” said Lyft CEO Logan Green in the earnings call.
With wait times increasing in some cities, companies will now have to reverse their routes and spend money to encourage drivers to return to the app.