Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Apr 25, 2024

Uber and Lyft asked Congress to bail out their drivers. Now they can't get enough drivers to come back to work.

Uber and Lyft asked Congress to bail out their drivers. Now they can't get enough drivers to come back to work.

Uber and Lyft are seeing surging demand as the US economy reopens. But drivers aren't returning, wary they'll make enough money to be worth the risk.

Uber and Lyft have some good news ahead: Riders in the United States are expected to flock back to the ride-hailing apps soon as COVID-19 cases wane due to increased vaccinations. The bad news is there doesn't seem to be enough drivers yet to pick them up.

In recent weeks, the app companies have been scrambling to rebuild their gig-economy workforce to meet an expected windfall of returning customers. But as Uber and Lyft pull out the stops to appeal to drivers, they're encountering a very different labor market than before.

Drivers dropped off the apps' ridehail services in the last year for many reasons. Many told Insider they were worried about their health, some found freelance work in different industries or for the apps' own delivery networks, others gave up their cars altogether. The chief concern, though, seems to be reliability of income. And with some drivers benefiting from a stronger financial safety net because of federal stimulus packages, the app companies need to overcome skepticism that there's more money in driving than not. Uber's and Lyft's once-assured worker pipeline is no longer as reliable.

Spokespeople for Uber and Lyft declined to comment on their pipelines but highlighted investments they've made throughout the pandemic to support drivers, including a recent driver stimulus, and pointed to data claiming drivers earned more now in many regions than before the pandemic.

Investors seem unconcerned; share prices for Uber, and to a lesser extent Lyft, are riding high in recent months on the expectation they'll be pandemic winners. The companies boast leaner corporate structures and are even talking about becoming profitable in the near future.

But that optimism rests on getting a supply of drivers to meet the demand. Earlier this month Uber announced a $250 million investment in driver stimulus, full of perks and short-term incentives. Drivers have been flooded with offers and hype, saying that people are making $30 an hour or more, including tips. That's twice what some drivers say they normally make – and a huge bump from the doldrums of the pandemic.

But others aren't so sure. One, who works for Uber, got an offer from the company in March that guaranteed he'd make at least $2,100 in a month in fare and tips. But he said he's currently receiving $3,000 a month in federal and state unemployment payments.

"I need $2,400 a month just to break even. It shocked me they'd use that number," he said. The worker, who drives for Uber in the Bay Area, preferred to remain anonymous for fear that speaking out could get him kicked off the app. He's planning on remaining on unemployment until September when the federal supplement runs out.

Economists are quick to point out that most people who receive unemployment benefits typically do not avoid rejoining the workforce. A study from Yale's business school last year found that people who received the initial $600 a week unemployment supplement that was part of the federal government's stimulus package returned to work at similar rates to those who did not receive those benefits.

Indeed, other drivers who have received unemployment benefits say their reasons for remaining off the app are more about COVID worries or issues with their car. But many have expressed concerns that despite the promises from the companies, they're not sure they'll make enough money.

"It's kind of a pride thing, nobody wants to feel like they're leaching off the system," said Erica Mighetto, an Uber and Lyft driver who's been off the platform since last spring. But even now as the offers from the companies are coming on a near daily basis she's still unsure whether it's worth buying insurance for her car again to re-qualify it for service.

Despite the promise of good money from the ride-hailing companies now, "you have to ask how long is it going to last?" Mighetto said.

New obstacles


If increased unemployment benefits continue to be a hurdle for recruiting drivers, the irony, of course, is the app companies partly have themselves to blame.

Last summer, Uber's CEO Dara Khosrowshahi wrote an open letter to President Trump in which he "respectfully and urgently request[ed]" that the company's 1.3 million drivers be included as workers eligible for the economic stimulus. When they were included in the final package, Khosrowshahi made a statement commending the move.

The episode touched on an ongoing controversy over how to classify these drivers. Labor advocates have lobbied hard for them to be classified as employees, and thus eligible for benefits and protections. Meanwhile the companies have advocated for them to remain contract workers, albeit with some benefits.

"I suspect some of the altruism exhibited by gig economy corporations in wanting workers to be included in the stimulus package, part of it was driven by public relations image," said R.A. Farrokhnia, a professor at Columbia Business School.

"But in the grand scheme they're most likely not regretting it. That was the right call to make at the moment."

For drivers, navigating the thicket of different unemployment programs to make sure they received the state or federal benefits has been its own obstacle. Mighetto said she's currently waiting to get over a month's worth of insurance that's been held up.

Other drivers are just hoping to see the promised big fares that Uber and Lyft have been hyping up. Lisa Ditalia, who drives for Uber in the Philadelphia area says she's heard the stories about offers, but hasn't seen anything come her way. She worked throughout the pandemic, even as fares slowed to a trickle, and is worried that her loyalty means she hasn't been eligible for the offers the companies are making to lure drivers back.

"Why don't you take care of the people who took care of you during the pandemic?" Ditalia said.

Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×