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Uber announced Wednesday it plans to spend an additional $250 million on “boosted incentives and guarantees” to persuade drivers to get back on the road amid a shortage during the COVID-19 pandemic.
“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time. In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver,” Dennis Cinelli, the head of Uber’s US and Canada ride-hailing business, said in a blog post.
But Uber also warned the increased pay won’t last forever.
“We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels,” Cinelli said.
Uber claimed in the blog post drivers in Philadelphia, Chicago, Austin, Miami, and Phoenix are currently earning pre-tip median incomes between roughly $26 and $31 per hour.
Uber has been notoriously reluctant to share driver pay data, and some independent researchers have found drivers may earn as little as $9.73 per hour after acounting for expenses.
But during the pandemic, many ride-hailing and food delivery drivers have seen their pay dramatically increase, due to the way Uber’s business model works.
Uber’s ability to provide on-demand rides at low prices depends on having lots of drivers active when passengers are looking for a ride. If only one driver is competing for a passenger, that driver can refuse the job until Uber’s algorithm jacks up the pay — which is esssentially what some DoorDash drivers are doing to boost their pay for food-delivery gigs.
If 100 drivers are competing for that same job, Uber can offer much lower pay …read more
Source:: Business Insider