The diminished need for rideshares during the pandemic caused many people to abandon gig platforms as a source of income, causing a driver shortage as the world starts reopening post-pandemic.
To help alleviate the drop-off of drivers, Uber is stepping up with $250 million in bonus money to encourage people to come back to the gig economy platform. Uber and Lyft have largely changed the way people handle shorter commutes and other local errands, but everything changed when the global pandemic took hold.
Gig drivers in the U.S. are down roughly 40 percent and both startup platforms are dangling financial incentives in the form of direct monetary benefits and other perks in the hopes of getting people back behind the wheel.
Uber said in a blog post on Wednesday (April 7) that drivers abandoned the platform because they couldn’t rely on getting enough ride requests to make it worth the overhead and time.
“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time,” Dennis Cinelli, Uber’s vice president for mobility in the U.S. and Canada, said in the post. “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.”
Uber said in the post that the $250 million “driver stimulus” is on top of what is “already high earnings for drivers.”
Uber and other gig economy firms have faced opposition to their business model in the U.K. with a Supreme Court ruling in February that Uber drivers are not self-employed and are entitled to the same benefits and wages as any other employees in the region.
As the global COVID-19 lockdown started to ease a bit at the end of last year, Uber and Lyft — both Silicon Valley startups — have once again moved from allies to competitors.
The new uptick in the demand for rideshare services gave Lyft a lift, giving the platform a strong volume of business in the last week of February, the most since March 2020.