Uber Technologies, Inc., commonly known as Uber is known for its services include ride-hailing, food delivery, package delivery, couriers, freight transportation, and, through a partnership with Lime, electric bicycle, and motorized scooter rental. Based on that, in the past few years, Uber has expanded its operations into more than just driving others around, but other forms of transportation. Despite this, the bulk of Uber’s value is derived from the ride-sharing service it provides.
Recently, however, Uber is dealing with a major hurdle on this end of operations. This is because after many drivers left during the pandemic due to a lack of demand they never returned. In fact, right now Drivers are ~40% below capacity.
So why are drivers staying off the roads? For one, many drivers fear the continued pandemic, which is what caused them to stop driving in the first place. As of now, only 50% of the U.S. population is fully vaccinated against COVID-19, according to the CDC. On top of this, many other former drivers simply found better jobs they enjoyed more when they left and therefore saw no good reason to return to being an Uber Driver. Lastly, some have seen employment benefits pad their wallets and thus have less of a push factor to hop back into the workforce – at least as an Uber driver.
Another huge reason is the actual baseline cut drivers are getting, in fact, despite the high fees recently (given the limited supply) drivers aren’t getting their cut. As a result, drivers have continued to call out Uber and even Lyft, explaining how difficult it is to make a living on the apps, especially when compared with the early days of the companies when drivers were guaranteed 80% of the fee. Nowadays that cut is much lower, with drivers seeing cuts between a measly 20-40% at times. What do you think about ridesharing services? And will this issue get solved?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.