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Rideshare Drivers Fear Uber Stimulus Will Have Long-Term Negative Effects

Published on Apr 20, 2021 at 9:33 am in News.

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In response to Uber’s $250 million stimulus package to recruit new drivers, current drivers are concerned about the long-term effects of the influx of money on their futures with Uber. Some predict that the short-term infusion of cash will ultimately reduce driver wages once more drivers are active and the funds run out.

In an interview with CNN, one Phoenix Uber driver, who asked to remain anonymous for fear of retribution, said, “I didn’t stop [driving passengers] because I was afraid. I only stopped because of supply and demand. I knew passengers were just not going to pay my bills. Customers were no longer tipping generously. I had to go back to passengers, which generally pay more if [riders] do longer trips.”

In recent months, ride requests have significantly picked up in recent months, but fewer drivers are available. For active drivers, this means good money for those who are experiencing little time without passengers and near-constant surge pricing in effect – which is when the company boosts prices for high demand from customers. Drivers, however, are expecting the pattern to end soon.

Uber’s ultimate goal is to get passengers into cars as quickly as possible at a price customers won’t bat an eye at. Regular surge pricing is bad for business, which is why Uber is trying to entice as many new drivers into service as possible.

According to industry experts from CNN Business, there’s a combination of factors that have kept drivers off the road, including the pandemic unemployment assistance and the ongoing threat of the virus. The price of gas is another factor. Uber is citing other factors: “According to our research, the top reason why drivers are hesitant to return is still concerns around VODI safety. That’s why we’re continuing to require that all riders wear face masks, and we’ve made it easier for drivers to navigate the vaccination process with streamlined appointment booking through our partnership with Walgreens.”

The $250 million stimulus is not the first time Uber has spent money on temporary driver incentives. For years, Uber has burned money on incentives to drive down prices for consumers artificially. According to Hubert Horan, an independent transportation consultant, “[Uber has] no ability to earn sustainable profits. They have no ability to provide what they have promised the marker (the prompt provision of a ride whenever someone wants one) at prices that the market would be willing to pay and would cover the actual costs of the services.”