After COVID-19: will ride-hailing pay well for drivers again?
As we go into the sixth month of the Coronavirus pandemic, we can’t help but think whether ride-hailing will ever be the same. Since the outbreak of the pandemic, governments have been taking extreme measures to limit the spread of the virus. With lockdowns, social distancing, and cancelations of all large events, the ride-hailing industry took a hard hit. Almost 70% of drivers decided not to work during COVID-19, effectively earning no money. With barley any riders and drivers, the ride-hailing market crashed dramatically. Bolt (formerly Taxify) sales plummeted 75% in Mid-March. Uber lost about 70% of its riders and launched a new initiative called Work Hub to help drivers find alternative work. All platforms, Uber, Lyft, and Bolt started offering new delivery services to stay afloat.
Where we are now
In The United States
The ride-hailing market recovered slightly its low in March and April. Lockdown restrictions are loosening up and people are starting to move more freely. Ride-hailing drivers are going back to work and the demand for the service is gradually picking up again. In the United States, Uber rides went up to 45% from their lowest point in April. While Lyft rebounded as much as 73% in some cities. Ride-hailing platforms have launched delivery services to help their drivers earn money during the pandemic.
Bolt just raised 100 million euros in funding to grab market share while other platforms, like Uber, are struggling. Bolt also recently launched a business delivery service. As one of their drivers, you can be a courier instead of a ride-hailing driver or opt into both. The recovery is still small but it indicates that the ride-hailing market will eventually reach its norm as people ease into their regular routines again. With all the alternatives ride-hailing platforms are provided, we might think that the ride-hailing era is dying. But, if we take a look at China’s recovery from the pandemic, along with the recovery of its ride-hailing platforms, we see that there is hope in ride-hailing paying off after COVID-19.
While the rest of the world is still starting to recover from the lockdown measures, China is well ahead. Civilians have gone back to work and almost entirely back to normality. Although restrictions are heavily placed in offices, schools and for all activities, the country is getting back on its feet faster than anywhere else. With normal life resuming, so is the ride-hailing industry. Didi Chuxing, the top ride-hailing platform in China, has resumed all mobility services. Throughout China, the ride-hailing market recovered by 60% and is currently growing by 17% per month.
Going back to old habits
The ride-hailing industry is showing clear signs of recovery from the pandemic. The more people are getting out and moving, the more demand there is. The big question here: When will people start going back to their old habits? When will events and traveling start to take place again on a broader scale? Most ride surges take place around airports, nightclubs, and events. Without these activities resuming, the ride-hailing market is still at loss, and drivers won’t earn as much as they used to.
Travel restrictions worldwide
Non-essential travel has been restricted globally for the past couple of months. However, by June 15th, European countries will start lifting travel restrictions. Countries including Italy, Germany, Spain, and Greece will resume flights within the EU. While other countries, like Turkey, Thailand, The United Kingdom, and Egypt are hoping to open up international travel by mid-summer. Minimal travel restrictions, including the removal of self-quarantine after travel, means people will move more freely and excessively.
Events and nightclubs
In Germany, lockdown restrictions have been eased up more than anywhere else in Europe. With museums, exhibitions, hairdressers, cafes, etc… open with social distancing and hygiene measures. The only drivers for ride-hailing demand that are still strictly prohibited are nightclubs and large events such as festivals, concerts, and trade fairs. According to the German government, these measures will continue until at least the end of August as part of the measures to stall the spread of Corona-virus.
How this affects you as a driver, the example of Berlin
Opening airports and lifting travel bans translate into a larger demand for ride-hailing services. Tourists are prone to using alternative transport services, like Uber, Lyft, and Bolt while traveling. With restrictions gradually loosening, people will start traveling again. As airport drop-offs and pick-ups resume, ridership will as well. Once restrictions on international travel are loosened, the tourism industry will recover, cities will become busier and busier, and more rides will take place.
Many ride-hailing drivers rely on the rides taking place to and from night-clubs, concerts, and other social activities. However, there is more of a delay with resuming large events. But this shouldn’t be a cause to worry. Currently, in Berlin, events with 200 people are permitted. This is expected to rise over the next two months to eventually 500 people in enclosed spaces and 1000 people outdoors by July 31st. With these numbers, we expect that within the next couple of months social activities will pick up again. For the time being, you can keep track of where smaller events or gatherings that are taking place. For example, some nigh-clubs in Berlin adapted to the pandemic restrictions and stayed open. The famous club Sisyphos opened up its doors as a Biergarten with a limited entrance. To stay up to date, check the map view in Bliq Ride to see events happening around you.
What to expect after COVID-19
As a ride-hailing driver during the pandemic, we advise you to consider all opportunities provided to you by ride-hailing platforms. Switching to courier, food delivery or on-road transportation services may be the better option for the time being. However, as indicated by China and multiple cities across the United States, ride-hailing demand is very likely to pick up again as time passes. Even though the pandemic is not fully over, people are slowly going back to their old habits. The services will remain intact, but most likely so will all the additional delivery services as people get used to the convenience they experience now.
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