At the start of the COVID-19 pandemic, consumers using Uber and Lyft saw a sharp rise in fares. But, despite predictions that prices would return to normal, reports show that they are still high and riders are paying more for trips than they were before March 2020.
One of the main reasons for this is that fewer drivers have returned to their roles than expected since additional unemployment benefits and other support ended recently.
Ridesharing companies like Uber and Lyft operate on a supply and demand basis, and the companies adjust their fares accordingly. This means that if there are more drivers available than riders, fares go down, and if there are fewer drivers, fares increase.
In March 2020, the pandemic shut down the economy. This meant a huge drop in the number of people driving for ridesharing companies.
Both Uber and Lyft said they expected these drivers to return once restrictions were lifted, and especially when extended out-of-work benefits expired. However, an article published in the Wall Street Journal has reported that this return has been much slower than previously thought.
As well as there being fewer drivers than expected at the moment, there are also more customers. Many consumers want to return to their normal lives and go out, but the number of drivers isn’t enough to meet this demand in some areas, especially in cities.
According to the report, ridesharing companies may face challenges getting drivers back into their roles anytime soon. Although they expect the numbers to go back to normal at some point, it’s hard to predict when this will happen.
One issue is that, during the lockdowns, many drivers found alternative work and don’t want to return to Uber or Lyft for a variety of reasons.
In addition to this, areas that ended unemployment support earlier found that prices haven’t increased as much as areas with full support. This is because it has caused a larger imbalance in the number of drivers and riders, which has meant consumers pay more for the services.
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