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Uber prices are still wylin. An Uber from Brooklyn to Bronx can set you back $100, while an airline ticket from New York to Miami can be cheaper than that on some days. Uber thought prices would normalize by now but what tf is going on?
Yes, demand has been soaring when everyone wants to be outside after being shut down for 2 years, but the main reason is that Uber drivers are returning too slowly. Uber had expected most drivers to return after the employment benefits expired nationwide in September, but that is happening at snail's pace.
US riders on average have still paid 22% more for a ride so far in October compared with January, and 30% more than they did in October 2019.
Drivers disappearing mirrors the trend rippling across the wider economy, in which a smaller labor force is contributing to wage and price inflation and causing Americans to wait longer for goods and services.
Some drivers also just won't return. They are worried about becoming ill with Covid-19 and have switched to other jobs in the gig economy like food delivery (don't want to share their car with anyone).
Openings in other traditional jobs have also attracted some ride-share drivers. With corporate America facing a backlash in the pandemic, it's never been easier to get a job in the cubicle. Some drivers haven’t switched back to ride-share over concerns that demand might taper off again if the health crisis persists.
While Uber and Lyft have poured millions of dollars into attracting drivers with bonuses, don't expect Uber prices to return to pre-pandemic levels any time soon.
Short Squeez Takeaway: Only a couple of years ago, you could take an Uber Pool ride for $3 in NYC. Ride-hailing services were game changing aka the extremely cheap alternative to other means of transport. Looks like they really have become the private jet of travel recently. Watch out for the 3rd quarter earnings release of both Uber (Thursday) and Lyft (Tuesday) this week, in which they are expected to address the labor shortage and prices.
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