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Gone are the days when you could take an Uber Pool for $3 in New York City. Uber and Lyft prices are wylin', especially in big cities such as NY, LA, Chicago and Miami. For the first time since ride-hailing services became mainstream, cabs in NYC are cheaper than Ubers. An Uber from Brooklyn to Bronx can set you back $60+, while an airline ticket from New York to Miami can be cheaper than that on some days. Taking an Uber is no longer a utility, it has become a splurge item.
According to Rakuten, prices are about 40% higher than what they were a year ago. What is causing the surge? Increased demand, as people return to traveling and socializing, and a huge driver shortage. Many drivers resorted to other ways of making money in the pandemic and are not returning. Some are also scared of getting sick. In May, Uber reported it had 3.5 million drivers, 22% less than a year ago.
Uber and Lyft are providing incentives to bring drivers back. Uber is putting $250 million into the effort calling it a "stimulus", while Lyft also spent $100 million on driver incentives in the first quarter of this year.
Short Squeez Takeaway: Will prices return to pre-pandemic levels? They might decrease slightly once more drivers return but it does not appear that they will return to pre-pandemic levels. Inflation is at record levels (5% in May) and Uber / Lyft will have to keep prices raised to incentivize more workers to come back. Can we bring back Uber Pool ASAP tho?
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