Uber and Lyft fares have surged because of a spike in demand post-pandemic and a shortage of drivers caused in part by the federal government’s extra unemployment benefits.
The ride-hailing giants acknowledged that their prices have gone up and wait times for customers to get cars are also longer, according to the New York Times.
The cost of a ride from the app-based companies was 37% higher in March than it was a year ago and in April was up 40%, according to a recent analysis by the research firm Rakuten Intelligence.
“We have not seen driver supply keep up with the demand growth in the U.S.,” Dara Khosrowshahi, Uber’s chief executive, said last week at a JPMorgan Chase tech conference.
Uber said on Tuesday that drivers were slowly returning to the road, with active driver hours increasing 4.4% during the week of May 17.
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The San Francisco-based company had 33,000 drivers join the company in mid-May, many of whom had stopped giving rides due to pandemic-related health concerns and lack of demand in the past year.
Uber and Lyft drivers qualify for the federal government’s Pandemic Unemployment Assistance funds under the CARES Act, which provide an extra $300 in jobless benefits on top of what the states already provide.
This supplemental government income has helped drivers with money shortages many of them faced during the pandemic but is also slowing the return of some drivers to the road now.
Other industries, such as the food and drink business, have also faced difficulties finding enough workers, in part due to the additional unemployment benefits.
Both of the ride-share companies have thrown large amounts of money into incentivizing drivers to return to work, with Uber spending $250 million of stimulus and Lyft $100 million, through cash bonuses based on the rides finished, but the extra money has not been as effective as it was before the coronavirus pandemic.
Lyft said it expects to fill the gap shortly.
“It is something we are taking extremely seriously, but something that we’re extremely confident [about], and I’ve already started to see significant movement on,” Lyft’s president, John Zimmer, said at the JPMorgan conference.
With the extra incentives offered to drivers, the median hourly driver wages in most U.S. cities are a little over $35 before tips, Uber said in a statement last month.
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“With the economy bouncing back, drivers are returning to Uber in force to take advantage of higher earnings opportunities from our driver stimulus while they are still available,” said Carrol Chang, head of Uber’s driver operations, in a statement.
