Uber and Lyft are offering drivers generous cash bonuses in order to keep up with the demand for rides as vaccinations climb and people start to return to their pre-pandemic activities.
With the new incentives, drivers for Lyft are earning as much as $44 an hour in Denver and $43 an hour in Philadelphia, while Uber drivers can make an average of $37.44 an hour in New York City and $32.60 in Philadelphia.
Drivers for ride-hailing services appear reluctant to return to their cars amid concerns for safety, while the shortage of work during the pandemic has meant that many have turned to other employment.
Meanwhile, rising vaccination rates and easing of restrictions has meant that more people are keen to travel for work and socializing so demand for rides has rapidly begun to outstrip supply.
In order to entice drivers back to the road and meet demand from riders, Uber and Lyft are offering large cash bonuses and incentives that are boosting driver wages significantly.
Uber and Lyft are offering drivers generous cash bonuses in order to keep up with the demand for rides as vaccinations climb and people start to return to their pre-pandemic activities
Lyft revealed that drivers now making an average $16 an hour more in the company’s top 25 markets, earning an average of $36 an hour compared with $20 before the Covid-19 pandemic.
Figures provided by Uber indicate that drivers are making, on average, more than $25 an hour before tips in an array of US cities.
The company said drivers spending 20 hours online per week in many cities were seeing median hourly earnings around 25 per cent to 75 per cent higher than pre-pandemic.
Those earnings are after Uber’s fee but before customer tips and expenses, which drivers are responsible for as independent contractors.
At the ride-hailing giant, drivers who take advantage of the new incentives can earn close to $2,000 extra cash if they make between 100 to 200 trips in a month.
According to Bloomberg, demand for ride-hailing tumbled a year ago when the pandemic and lockdown restrictions set in, with volume for Uber Technologies Inc. and Lyft Inc. dropping more than two-thirds in a single week in March 2020.
This year initially saw a gradual increase in demand, but this accelerated last month as vaccination rates increased and people increasingly returned to their pre-pandemic activities.
Drivers appear reluctant to return to their cars amid concerns for safety, while the shortage of work during the pandemic meant that many have turned to other jobs
Data from Bloomberg’s Second measure revealed that Lyft’s sales for the week ended March 29 were 80 per cent higher than in the first week of the year, and Uber’s climbed 76 per cent over the same period.
At the start of this month, Uber launched a $250 million ‘stimulus’ plan to boost US-based driver earnings and lure wary drivers back to the ride-hailing platform. The company did not offer specifics on how it would allocate the funds for each driver.
In a blog post, Dennis Cinelli, mobility vice president for Uber, said that the company wanted to reinvest in drivers to welcome pre-existing ones back and ensure first-time drivers do well as they learn the ropes.
‘In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time,’ he said.
‘In 2021, there are more riders requesting trips than there are drivers available to give them – making it a great time to be a driver.’
This year initially saw a gradual increase in demand for ride-hailing, but this accelerated last month as vaccination rates rose and people returned to pre-pandemic activities
Cinelli also noted that the company expected this to be a short-term situation and that bonuses and incentives would not continue when more driver returned to the road.
He added: ‘We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels.’
Uber and Lyft executives have told investors driver supply was a concern as demand is expected to ramp up further. Lyft said investments to boost driver supply will create first-quarter revenue headwind of $10 million to $20 million.
Both companies have been criticized by city officials and worker advocacy groups in the past for paying too little by oversaturating markets with drivers, pushing down prices. Uber and Lyft reject those claims.
In Seattle, which in January implemented the city’s minimum wage of $16.39 per hour for ride-hail drivers, a city-commissioned study found drivers net only about $9.70 an hour, while a study of data provided by Uber and Lyft showed most drivers’ earnings are roughly in line with the city’s median.