Rideshare companies say driver shortage is pushing prices up
It's not just you: Uber and Lyft rides are more expensive, company executives said this week.
Why it matters: Demand for rideshare is roaring back as the economy starts to reopen, but the same can't be said for drivers on the apps. That means fewer cars on the road, causing a supply gap that's pushing up prices.
What's going on: Lyft says stronger rider demand began to outpace driver supply at the end of February.
- One reason for the driver deficit: safety concerns and fear of contracting the virus, Uber CEO Dara Khosrowshahi told CNBC on Thursday.
What they're saying: "We've told our investors we are going to lean into driver supply. We are going to put up our capital to bring more drivers into the system" to alleviate pricing pressure, Khosrowshahi said.
- Uber last month announced a one-time stimulus payment cumulatively worth $250 million to help lure drivers back.
- "As the vaccine rollout continues, driver availability should naturally improve," Lyft CEO John Zimmer said on a call with Wall Street analysts, though it expects to invest in incentives to help move the ball along.
The dynamic has led to record earnings for Lyft drivers in some U.S. cities, the company says.
- Lyft drivers in top markets earned on average more than $30 per hour, 85% above pre-pandemic times. The company hopes this will help pull even more drivers onto the platform.
The bottom line: Add rideshares to the list of things that cost more — at least in the short-term, as the economy revs all the way back up and the vaccination campaign picks up pace.