Uber and Lyft, the two ride-hailing conglomerates monopolizing public transport and taxi services, have hit a few speed bumps in the past several weeks. Propelled by blind success, both businesses took off with their ingenious concept. Not only do these services enable everyday people to work part-time for Uber or Lyft at their own leisure, but those using their apps can find a ride within minutes for a reasonable fee. It’s especially helpful in regions where taxi cabs aren’t as prevalent like they are in places like New York City. Yet, with more and more people relying upon Uber or Lyft, coupled with record low unemployment rates, these companies are left wondering, who will be our drivers?
These drivers are technically independent contractors. Once someone becomes a driver, they can choose when they want to work. At Lyft alone, approximately 91 percent of their drivers are “on duty” for less than 20 hours a week. And understandably so, because after subtracting gas costs (which aren’t covered by the companies) drivers average $5 per hour. On top of that, the service requires the drivers to use their own cars which can endure wear and tear from the various passengers who ride in them. It’s worth mentioning that peak profit times occur in the evening—Uber and Lyft are praised for convenience in relation to helping intoxicated people get home. Understandably, the thought of making $5 an hour to rack up mileage, wear down your car and deal with drunkards isn’t all that appealing.
Both companies have resorted to incentives to keep drivers driving. Within the past 12 months, they have netted losses traipsing into the billions. This puts the companies in a rut. Raising the fare will deter customers from using the ride service, but keeping rates low will also dissuade drivers.
It’s feasible to conclude that within the coming years taxis will virtually become obsolete, and until technology has advanced far enough to create bulk self-driving cars, Uber and Lyft need to alter their marketing strategy to potential drivers. Rather than promoting the occupation as a full-time gig, they should make the appeal be the fact that it is part-time. Uber and Lyft drivers constitute approximately 1% of the U.S. workforce. Regardless of how high turnover rates may be, and the fact that most drivers are on call less than 20 hours a week, if more people work part-time then it won’t be a concern. Being an Uber and Lyft driver shouldn’t replace someone’s job; it should supplement their current job and be seen as an opportunity to make extra money.
Through this ideology, there will be a surplus of drivers available, there should be less of an uproar over the fare and lack of unemployment won’t be a concern.
