Lyft gaining on Uber where it counts

A lot of exciting news popped up this week. Uber drivers in Australia will soon see a minimum pay guarantee. Drivers in the U.S. are expressing positive experiences from the Tesla-Uber-Hertz partnership. And, is Lyft starting to close the gap on the market share? All this and more in this week’s roundup with senior RSG contributor Paula Lemar. 

Uber agrees to Australia minimum pay body after similar moves in Britain, Canada (Reuters)

Summary: Uber Technologies Inc (UBER.N) and Australia’s main transport union agreed on Tuesday to back a federal body that enforces minimum pay for the company’s drivers, joining a global thawing of relations between the ride-hailing giant and industrial bodies.

In a joint statement, Uber and the Transport Workers Union (TWU) said they signed an agreement to support an unspecified federal body to “set minimum and transparent enforceable earnings and benefits/conditions for platform workers”.

The new body would also oversee disputes that resulted in drivers in the so-called “gig economy” having their accounts shut off, and protect drivers’ rights to organise with a “collective voice”, the statement said….

My Take: Reactions on the RSG Facebook page were mixed when this news was shared. One driver from Australia took to the comments section and stated:

“I’m an Australian driver, in Australia. We and the union that represents us have been in negotiation with Uber for 3 years. Ubers stance did not change until we had a change of government 2 months ago. One of the incoming election promises was that they would put workplace protections in place for those working in the gig economy. Uber of course were hoping that the opposition didn’t win power, but they were elected. The real story is that Uber either came to the table or the new govt would hobble them with regulation. Workers rights in Australia are heavily protected, Uber have a lot of changes to make.”

In response to the question of if minimum wage will come to the U.S., nationwide, Gabe commented, “It’s possible, but it won’t be based on all on-app time, but rather time/distance minimum. Hopefully that will take into account the 30-50% unbooked time most drivers experience.”

One commenter expressed concern over going “hourly” and that drivers will lose their freedom if that becomes the standard in the U.S.

Uber drivers are liking the Teslas (The Verge)

Summary: Uber’s plan to electrify its driver fleet by 2030 seems to be off to a good start. The ride-hailing company announced today that over 15,000 Uber drivers have signed on to rent Tesla vehicles through its partnership with car rental company Hertz. Uber claims the deal is its “largest-ever expansion” of EVs on a mobility platform in North America and that there have already been more than 5 million Tesla rides driving over 40 million miles since the program started last year.

The popularity and demand for electric vehicles are at an all-time high for consumers, especially with the increased cost of gas. The same is true for Uber drivers, who are responsible for the costs associated with refueling the vehicles no matter what it runs on. “The program is a win for drivers, who are expressing pride in being part of the climate solution and are welcoming increased earnings through gas savings, electric vehicle incentives, and tips,” said Uber SVP of mobility and business ops Andrew Macdonald in a statement.

Uber’s own assessment of their drivers’ all-electric experience was glowingly positive. “It handles the mileage really well,” said one driver. Uber claims that 95 percent of drivers renting Teslas through Hertz have not driven an EV on the platform before, and 92 percent of them are now considering their next vehicle purchase to be an EV….

My Take: Some commenters on the RSG Facebook page shared stories they had heard of drivers saving money by taking this route considering the high cost of gas. One stated:

“Saw an article where a lady was spending $600 a week on gas for her Camry. Switched to a Tesla and is now paying $440 a week with the lease. Smart move.”

They clarified later that the $440 a week was the cost of the lease as well as the cost to charge the vehicle, so an approximate savings of $160 a week just by switching from the Camry to a Tesla.

One respondent said that they will not make the switch unless Tesla manufactures an SUV that qualifies as an XL vehicle on the platform.

Lyft Continues to Gain on Uber in Crucial Areas (Nasdaq)

Summary: Ride-sharing company, Lyft (LYFT), has significantly increased its active rider base and revenue. Hence, it could be a solid investment in this bear market.

Lyft’s growth strategy has expanded into new markets and offered food delivery, bike-sharing, and scooter-sharing services. This strategy has allowed Lyft to compete effectively with Uber (UBER), which operates in these sectors, but not as aggressively.

Lyft operates in the U.S. and Canada only. It has a delivery platform for its drivers to pick up food, retail products, and auto parts for customers. Although Lyft does not have a dedicated food delivery option like Uber Eats, it nevertheless took advantage of the circumstances and streamlined its structure to become more efficient.

Analysts predict Lyft revenue to increase greatly in 2021 and 2022, which is a good thing to come. They also expect losses to be narrowed in the process. The interest rates are increasing, and the call for higher wages is getting louder, which means if you are not generating an acceptable profit, it will be tough to thrive. While some companies might be able to afford new contracts and additional employees, others will grapple with growing costs and diminishing returns….

My Take: I’ll be curious to see if this trend continues. It would be wild to see the tables turn and have Uber taking a backseat to Lyft. I wonder if that’ll ever happen. What would that world be like? Any different than it is now? What do you think?

Also in the news…

Uber, Lyft Drivers Switch to Teslas as High Gas Prices Squeeze Profit (Bloomberg)

Thoughts: Another article on how drivers are switching to electric vehicles, Teslas in particular, to combat high gas prices. Teslas make sense because of the Hertz partnership, but there are far cheaper electric cars out there, so if you’re serious about making the switch and live in a city where you can access chargers (or add charging capability to your house), you don’t have to buy/lease/rent a Tesla.

DoorDash patent application hints at autonomous vehicles under consideration (Restaurant Dive)

Thoughts: Everything we’ve seen lately shows that more and more platforms are continuing to refine their autonomous vehicles and exploring all options. Even Walmart recently ramped up its autonomous delivery services.

Chicago gig workers who rely on cars make changes as gas prices stay high (Chicago Sun Times)

Thoughts: Everyone is pivoting. With gas prices remaining high, drivers of all kinds are trying to find ways to avoid filling up as frequently. This might be the new norm, and we’ll all have to figure out a way to deal with it.

Walmart Canada kicks off 30-minute delivery via Instacart (Supermarket News

Thoughts: 30-minute delivery is a tall order. I’m sure this takes the size of the order into account. Can’t promise a 30-minute delivery window if you have 100 items to shop for.

Is Lyft the new Uber? Share your thoughts on the shift in the comments! 

-Paula @ RSG