How Uber makes drivers pay for the COVID-19 pandemic
The epic hit of the Coronavirus Pandemic has put almost all businesses in survival mode. Everyone is struggling, but those in the ride-hailing industry have it the hardest. With social distancing and self-quarantine, there’s barely any work for ride-hailing drivers.
For all the ride-hailing services, Uber, Lyft, FreeNow, and many others, passenger trips have taken a dive. Uber rides alone have fallen by 70%. With a lack of demand for the services, companies have been trying to cope with their losses and adapt to the situation.
All ride-hailing companies have suspended their ride-pooling services and most have stopped accepting new drivers. While these measures are appropriate for the time being, the limitations have intensified the already fierce competition between companies, railing down fares and giving customers endless amounts of discounts and offers.
Trying to keep their drivers busy and their income steady, some services have even thought of alternative ideas to ride-hailing to keep them going during the pandemic. Lyft is launching a new delivery service pilot program, where drivers can deliver “essential” items like groceries, medical supplies, and home goods. Bolt did launch a same-day or even same-hour delivery service shortly after lockdowns in Europe were announced. The program is set as a way to sustain their drivers’ income and engagement.
Uber, on the other hand, did not provide its drivers with much to go with during the COVID-19 pandemic. Although multiple promises have been made, such as paying two weeks’ sick leave and better promotions for drivers, Uber focused more on saving the corporation that its drivers. Even worse: The company outsourced the loss of the pandemic to the drivers by canceling bonuses that are essential to the business of most Uber partners.
Throughout Germany, Uber notified its drivers that “the additional service fee for a reduced service will end on 06. April 2020.” Usually, after completing 50 rides per week, Uber drivers received a discount on the service fee. Then, Uber only charged 10% of revenue. Facing the pandemic, Uber removed this promotion and increased its service fee to a fixed 30%, further increasing the pressure on driver partners.
Uber’s new permanent service fee cancels out any gains made from any promotions offered to drivers. No matter the number of rides, hours worked or promotions used, drivers will end up forfeiting one-third of their earnings. In times of struggle, Uber decided to put the load on its drivers, instead of easing their pain.
What Uber drivers can do now to get through the pandemic:
Many restaurants are now forced to close for guests and instead started delivering food. Other delivery jobs are also booming, such as parcel delivery, as people have suddenly a lot of time to shop online.
Even if Rideshare is currently on a never-seen low, chances are good that people are ready to take even more rides as the lockdowns lift. Taking public transit is considered an infection risk by most and passengers will likely prefer individual transport options (such as ride-hailing).