8 min read

    8 min read

    What a week for news! There’s a lot to catch up on this week with senior RSG contributor John Ince, including Uber suspending shared rides, how delivery may help float gig companies and workers, and more.

    Uber suspending shared rides [The Hill]

    Sum and Substance:  Uber Technologies suspended shared rides on Tuesday in the United States and Canada in an effort to limit the spread of the coronavirus.


    Uber users could previously book lower-cost trips by sharing a vehicle with other riders who were traveling in the same direction. However, the option is no longer available for users in the two countries.

    My Take:  This makes sense. Shared rides bring together strangers who just might be carrying the virus. Better safe than sorry. Did anyone really like Pool rides anyway?

    How Uber, Lyft, Seamless and more are addressing taxed gig economy workers  [Techcrunch]

    Sum and Substance:  The ongoing COVID-19 crisis is going to prove a major test of the gig economy. Already an ever-increasingly important part of our daily lives, grocery and food delivery services along with ride-hailing apps are going to play a fundamental role in helping individuals enact government-recommended social distancing.

    More often than not, however, these workers get short shrift. Many times those who drive our cars and deliver our food do so with little pay and long hours. As for healthcare, well, that’s a distant dream for many.

    This situation is only going to worsen many of these issues, and there’s a very real fear that the United States’ inability to provide the working class with a legitimate social safety net will only incentivize workers to continue to do their job while sick, further exacerbating the spread of the novel coronavirus, in spite of restrictions on gatherings and other attempts to increase social distancing.

    My Take:  It’s a difficult situation and these vague statements are about the best we can hope for in the moment. As things become clearer, we can expect more specificity, and with that we can also expect more people to be dissatisfied.

    Uber Can Handle the Coronavirus Hit, Analyst Says [Barrons]

    Sum and Substance:  The stock of Uber Technologies has been cut in half by the coronavirus pandemic. The shares (ticker: UBER) were down another 10% Monday morning, to $20.32. But the company will make it through the viral stress test, says Pierre Ferragu, in a note by New Street Research.

    Ridership will be hurt as folks stay home, Ferragu acknowledges, but the Uber Eats food delivery service could benefit and the company’s asset-light business model should allow it to adjust costs and still reach its goal of achieving break-even cash flow by the end of 2020.

    My Take:  This writer thinks things will be okay. I respect that view – but one thing is for sure.  Uber and Lyft won’t be meeting their profitability targets any time soon.

    Uber Drivers Say Earnings Are Falling, and Many Have No Other Income  [Bloomberg]

    Sum and Substance:  U.S. drivers for Uber Technologies Inc. and Lyft Inc. said their income is cratering, and they have no other way to make money, according to a survey by an influential ride-hailing blog set to be published Tuesday.

    Most drivers in the survey reported a drop in earnings, a reduction of their hours on the road and a lack of alternative sources of income. The survey of almost 200 drivers was conducted by the website Rideshare Guy from Friday to Monday, as Americans rapidly abandoned normal daily activities to slow the coronavirus spread. On Tuesday, Uber and Lyft said they were suspending carpooling services.

    Few drivers in the survey said Uber and Lyft were doing enough to support them during the hardship. The companies said they will compensate drivers unable to work as a result of a Covid-19 diagnosis or quarantine ordered by officials. But those policies don’t account for the market-wide shortfall brought on by the pandemic. “Drivers are on their own,” said Harry Campbell, a consultant and founder of the website that conducted the survey.

    My Take:  Great write up of our big survey with Uber/Lyft drivers and those working in delivery. If you’re a driver who hasn’t signed up to drive delivery – you should. Amazon is also looking to hire drivers – make sure to check out our Amazon Flex review here.

    Coronavirus fears halt autonomous vehicle testing for Uber, Cruise, Aurora, Argo AI, Waymo, and others  [Venture Beat]

    Sum and Substance:  Following Waymo’s announcement that it would limit its ride-hailing service in Phoenix, Arizona and autonomous car testing on California roads in response to the COVID-19 pandemic, several competitors have adopted similar measures today and earlier this week. Uber, GM’s Cruise, Aurora, Argo AI, and are among the companies that have suspended driverless vehicle programs in the hopes of limiting contact between drivers and riders.

    “Our goal is to help flatten the curve of community spread,” said Uber Advanced Technologies Group (ATG) CEO Eric Meyhofer in a statement. “Following recent guidance from local and state officials in areas where we operate our self-driving vehicles, we are pausing all test track and on-road testing until further notice.”…

    My Take:  The virus wins – even among driverless cars? It’s a moment to consider what’s really happening with driverless cars.

    How a coronavirus recession could be disastrous for Uber and Lyft drivers  [LATimes]

    Sum and Substance:  Christian Perea, a San Francisco Uber driver with diabetes, stopped driving as a precaution at the end of February. William Smith, a Lyft driver in San Francisco, didn’t think he could stop because, until Tuesday, he was expected to perform a minimum number of rides in order to keep the car he rents through the ride-hail company. Kimberly James, who delivers for several on-demand apps and works for Uber and Lyft in Georgia, hasn’t picked up passengers since March 10 because she has an autoimmune disease that could make her more vulnerable to a viral infection.

    … Some say these gigs may soon not be worth the risk, especially in the Bay Area, where residents are under an order to shelter in place. (The order exempts workers in essential categories, which includes transportation.)

    The last time the U.S. economy entered recession, in 2008, the on-demand sector didn’t exist. How it will respond to a slump is a matter for speculation.

    My Take:  So here you have it. Driving for Uber and Lyft isn’t going to be the way forward for many drivers. What will be the way forward? Delivering groceries, food and more. It beats sitting around!

    Lime and Bird halt e-scooter services in Europe and US — guess why…  [TheNextWeb]

    Sum and Substance:  E-scooter rental companies Lime and Bird are putting their services on hold for an indefinite period of time in cities across Europe, the Financial Times reports.

     Lime is reportedly also taking the same action across North America, as the coronavirus (COVID-19) has lead to a drop in user numbers.

    Following the increase in public self-isolation, to slow the spread of the virus, demand for e-scooter rentals has floundered.

    My Take:  This was inevitable. The scooters didn’t have the staying power to withstand the virus. Once the virus passes (or if) we’ll see whether they can once again flourish.

    Uber says rides down by as much as 70% in cities hardest hit by coronavirus, looks at delivering meds  [Techcrunch]

    Sum and Substance: Uber  — the on-demand transportation and food delivery behemoth — has been hit hard by the novel coronavirus pandemic. CEO Dara Khosrowshahi said today in a call with investors that ride volume has gone down by as much as 60%-70% in recent days in the hardest-hit cities like Seattle, and that’s before you consider the pauses in some of its services, and the dubious distinction of becoming one of the earliest proof-of-concepts of just how spreadable this virus really is.

    But Khosrowshahi also told investors in an update that the company believes it is “well-positioned” to ride the troubles out even in the worst-case scenario of rides down by 80% for the year. And even as rides for passengers are down, it is also considering leveraging its network for delivering other things, such as medicine or basic goods.

    My Take:  This call to investors was reassuring to say the least. The stock shot up 40%. But Uber is still shirking the answer to the biggest question: will Uber ever be profitable?

    Uber is lifting restrictions on drivers in NYC in response to coronavirus [The Verge]

    Sum and Substance: Uber will stop blocking drivers in New York City from signing on to its app, which it has been doing since fall 2019. The company says it wants to give drivers one less thing to worry about amid the novel coronavirus pandemic.

    Uber began restricting drivers’ access to the app after the city passed a law in late 2018 requiring ride-hail companies to pay drivers at least $17.22 an hour after expenses. The pay formula uses a so-called “utilization rate,” which accounts for the share of time a driver spends with passengers in their vehicles compared to time spent idle and waiting for a fare.

    The rules penalize companies for enabling too much car traffic.

    My Take: Hey, remember when Uber and Lyft were locking drivers out of driving in NYC because there was too much traffic (and Uber didn’t want to pay the minimum of $17 an hour)? Well, that’s all gone away now thanks to the coronavirus. But how many drivers are really getting rides in locked down NYC?

    Readers, what do you think of this week’s roundup?

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    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.

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