News
Gig Economy Woes: Uber and Lyft Are Scrambling to Find Drivers
The Wall Street Journal reports that the prices for ride-sharing services like Uber and Lyft have reached record highs and have pushed the companies to rethink how they attract new drivers amid a shortage of gig workers across the U.S.
Uber and Lyft are reportedly investing millions of dollars into incentives for drivers to return and alleviate the scarcity of workers and tempered fare increases in some areas, but this solution has also raised the companies’ costs.
Many analysts expect that the driver shortage will persist through the third quarter, pressuring Uber and Lyft to deal with shifting dynamics in the gig labor workforce that they have acknowledged will require long-term solutions.
Executives say that the model they built their businesses on, luring riders with discounts and incentivizing drivers to provide those rides, cannot be the model that sustains them in the long term. Carrol Chang, Uber’s chief of driver operations for the U.S. and Canada, commented: “This is a moment of deep introspection and reflection for a company like ours to pause and say, ‘How do we make the proposition for drivers more attractive longer term? It is absolutely a reckoning.”
Chang’s team is in talks to fund education and career-building programs for drivers. Lyft is reportedly exploring a new partnership aimed at reducing drivers’ expenses which could involve sizable discounts on gas or insurance or help with purchasing vehicles.
Gad Allon, a professor at the University of Pennsylvania’s Wharton School who focuses on the gig economy, noted that drivers’ biggest grievance is pay, and so far this issue has not been addressed. “A long-term solution is solving a problem drivers have, not solving an imaginative problem,” Allon stated.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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