Uber, Lyft charging exorbitant prices, wait times becoming long

Ride-hailing giants Uber and Lyft are reportedly charging exorbitant prices for ferrying passengers, even as wait times are rising, owing to the growing scarcity of drivers. With fares reaching as high as $150, and no rides being available for nearly hours on end, passengers are having to face difficulties reaching their destinations, along with the hassles these problems bring.

Even as both these companies struggle to lure in more drivers by bringing in a number of tactics, riders are being forced to face the brunt of the driver scarcity. Never before would cabbies or drivers in general have seen perks like one-time signing bonuses for new entrants, along with other cash benefits. But the tricks just don’t seem to be working.

Uber Lyft charging
Image Credits: Techcrunch

Fares Up, But Driver Pay Increased Too

Some cities have fare prices being up as much as 79% from pre-pandemic levels, as per reports by Gridwise Inc. To this, Uber CEO Dara Khosrowshahi replies that even though prices are admittedly high, they are nowhere near the “exaggerated figures” being put forward by third-party analysts. He has even claimed that fares have leaped by around 30%, but, on the other hand, driver salaries have also jumped 37%.

During an earnings call on Wednesday, Khosrowshahi said that even though drivers are much to keen on hitting the road again, bigger cities like LA and New York continue to see supply being outpaced by demand, resulting in longer wait times and higher fares. Meanwhile, Lyft CFO Brian Roberts has also informed investors that the company doesn’t expect the “driver crunch” to hold it back for long.

Thanks To Increased Bonuses, No Thanks to Higher Fares

Meanwhile, even though many drivers do claim that their pay has gone up, they have added that the same isn’t really because they are getting any benefit out of the soaring prices of individual trips. Instead, the same is because of an increase in the bonuses and other perks that are being offered to them for completing trip quotas.

This is backed by Rideshare Guy, a firm which surveys ride-share drivers. Founder Harry Campbell asserts that driver pay has hit a five-year high, and that too, in small markets as well as big.

At the same time, the company also holds that despite having to pay more to drivers, Uber is raking in large sums of money, thanks to the soaring fares. That means, even if a rider is being charged double of the standard charges for a ride, it doesn’t mean that th extra bucks go into the driver’s pocket.

As such, “a big percentage” of the money made per ride is pocketed by Uber (or, on the same note, Lyft), and drivers are being paid more not in the form of a higher percentage of a ride’s fare, but instead, as bonuses on top of the standard pay based on the drive’s distance and duration.