Workers have been leaving the ride-hailing industry leading to a severe shortage of drivers. According to Aquent CEO John Chuang, Uber Technologies (NYSE: UBER) and Lyft Inc. (NYSE: LYFT) are to blame for the crisis.
Ride-hailing companies facing driver shortages
Chuang said, “One, [ride-sharing companies] have very low wages,” Chuang said. “And they are very undesirable jobs. Now that we have 7 million less employed workers in America right now, you know, the first jobs to go are the undesirable jobs. And unfortunately, their jobs are undesirable.”
According to Chuang, what is preventing drivers from getting back is the low wages and lack of benefits in the industry. In addition, he said that gig economy workers in the ride-hailing sector don’t have a social security net they can fall back on, which makes jobs in the sector riskier than traditional jobs. Chuang added that as a result, gig economy workers are voting with feet and leaving their jobs.
Ride-hailing companies Uber and Lyft have been pursuing aggressive options to come up with measures to address environmental concerns and regain workers. However, despite the companies putting millions into initiatives to entice drivers back, mosts are not keen on the stimulus packages or getting in on the rising prices. With few drivers, customer wait times in the US have increased, leading to a price surge.
Uber and Lyft drivers in a low-key strike
Rideshare Drivers United volunteer organizer Nicole Moore told CNBC that drivers are currently in a low-key striker. Former taxi-hailing drivers are not getting back for various reasons, with most still wary of the continued COVID-19 pandemic.
Wedbush’s Dan Ives stated that there is currently a mini debacle for ride-sharing companies regarding worker shortage and price surges across the US. Additionally, Ives said that drivers are around 40% below capacity.