Uber prices soar during holiday season as ride-sharing giant still struggles to lure drivers back behind the wheel following pandemic
- Uber has been forced to raise its prices following a drop in the number of drivers
- Pandemic led to a massive drop off with many switching to UberEats delivery
- Drivers still wary about returning to the app due to safety concerns and inflation
- App has also been changed and allows drivers to see where passengers want to go before accepting rides
Uber says it’s had to raise prices at the height of the holiday season because it continues to face a driver shortage following the pandemic.
While the numbers of people traveling over the last week’s Thanksgiving break have now returned to pre-pandemic levels, thousands of former Uber drivers have decided not to get back behind their steering wheels and work for the company.
In an effort to try and attract drivers back to the ride-sharing app, Uber has jacked up prices in an attempt to lure them back – but, coupled with inflation it also means the increased cost is being passed onto passengers.
Uber has been forced to raise its prices following a drop in the number of drivers in the wake of the pandemic
When Uber bosses saw how drivers were not returning to drive for the company as quickly as they would have liked several changes were made to the driver’s app.
The company has now begun showing drivers their destinations and fares upfront, in an effort to increase transparency. Previously, drivers were not shown their destination until they accepted the ride.
Another reason for the shortage of drivers is that many switched to Uber Eats and began delivering food during the pandemic.
Some drivers have been hesitant to switch back to transporting passengers because of safety concerns with ride-share drivers concerned about risks including exposure to covid and a rise in carjackings in big cities across the country.
Uber CEO Dara Khosrowshahi noted how when Uber saw drivers not returning to drive for the company as quickly as they would have liked, several changes were made to the driver’s app
The chart above shows how NYC cab fares have risen over time
Uber CEO Dara Khosrowshahi claims not to have seen any signs of a pullback in spending on everyday items such as ride-shares out to dinner.
‘Our business in Chicago now is booming,’ he said while speaking in the city last week.
‘Inflation is driving up prices, but a bigger factor is a shortage of Uber drivers’, he told the Chicago Tribune.
‘The number of drivers has been growing, which is improving estimated arrival times and lowering surge prices and inflation is encouraging more people to begin driving for Uber, as they seek ways to earn extra cash for items like groceries’, he explained.
The company is also rolling out a program whereby passengers and drivers will be able to record their rides in the hope of increasing safety for both parties who would be notified once a recording has begun.
The recording will only be accessible if something goes wrong during a ride.
‘What we’ve seen is, and it’s not a surprise, when people are being recorded they just behave better,’ Khosrowshahi noted.
Uber has pledged to be carbon neutral in the U.S., Canada, and Europe by 2030 and it looking to give drivers an incentive to use electric vehicles.
Delivery drivers and gig workers hold signs as they protest in front of Uber headquarters in October in San Francisco, California to announce the formation of the California Gig Workers Union
Currently, any driver renting a Tesla from Hertz is given an extra dollar per trip.
Uber is not the only company to increase fares; Lyft is also planning to increase its rates by 24 percent per mile and 7 percent per minute.
Last month, it was reported that Lyft rides were on average about 60 cents more expensive due to inflation-increasing insurance costs for drivers.
The ride-share company also added a 55-cent surcharge earlier this year to help drivers combat the costly gas prices. This resulted in consumers paying an extra $1 for a cab ride.
The added costs resulted in the average cost of a ride increasing by three percent and an 18 percent increase in the service fee, according to YipitData.