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Uber hopes to lure back drivers with $250M in incentives

Stimulus meant to increase number of drivers available as riders return to the service

Uber will spend $250 million on driver stimulus incentives in an attempt to lure drivers back to the service as the lifting of COVID-related restrictions increases demand. (Photo: Uber)

Uber (NYSE: UBER) has announced a $250 million “driver stimulus” boost in an attempt to lure drivers back to the service as pandemic-related restrictions are lifted and riders return.

“Boosted incentives and guarantees will help welcome existing drivers back to Uber and ensure first-time drivers do well as they learn the ropes,” wrote Dennis Cinelli, vice president of U.S. and Canada mobility for Uber, in a blog posting announcing the initiative. “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.”

According to Cinelli, Uber drivers are making an average of $31.03 per hour in Philadelphia, $28.73 in Chicago and $26.05 in Miami before tips and before the driver stimulus kicks in.

“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,” he wrote.

In its end-of-year earnings report, Uber said mobility-related bookings were $6.79 billion in Q4, off 47% year-over-year. Uber offset some of the decline thanks to its Uber Eats and Uber Freight divisions. Uber’s Delivery business, which includes Eats, saw a 66% year-over-year increase in merchants on its platform and posted 128% growth in gross bookings in Q4, reaching a $44 billion run rate by December. Uber Freight posted year-over-year growth with revenue of $288 million in Q4, up 8.6% over Q3.

Gridwise co-founder and CEO Ryan Green in February told Modern Shipper that rideshare driver availability had fluctuated throughout 2020.

“From the supply of drivers as soon as the pandemic came in March, by April we saw a 65% decline in drivers for ride-hailing services,” he said. Some, he said, switched over to delivery services, especially as demand for food delivery skyrocketed. Food delivery, though, was paying as much as $2 less per hour than rideshare, Green added.

“The ride-hailing drivers that continued to drive were making a median of up to $18 an hour while the food service drivers were making $16 an hour,” he noted. Food delivery has continued to be lower-paying than rideshare, Green added.

Green said the supply of drivers that rideshare companies built up heading into the summer suddenly was too great for the demand in the second half, depressing rates.

“What you did see was a big boost in driver earnings per hour [early] so those drivers that were out on the road in the summer [did well],” he said. The peak was in summer, but that “just continued to decline … correlating directly to a decline in [driver] incentives. As the second wave came around, there was a decrease in demand, and service providers had built up supply, so now there was no [reason for incentives].”

Uber feels it’s time to reinvest in drivers.

Click for more Modern Shipper articles by Brian Straight.

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  1. Concerned Driver

    How bout offering an incentive or gratuity pay to those drivers who stayed the course and continued to drive under the platform throughout the pandemic. Drivers take an awful risk daily to insure that people get to their desired destinations. I have driven under the platform for 5 years now without a simple thank you being sent from Uber. Last year I drove over 80,000 miles for the company, have a rating of 4.98, and had over $27,000 in fees and expenses. Acknowledgement and gratuity from Uber would go along way towards morale.

  2. Tcs53

    Not sure what being a Uber driver has to do with Freight 🤔 but it would take more than $28.73 per hour in Chicago to get me behind the wheel. Seeing as how that’s before taxes and insurance. Never mind all the car jackings taking place. Gotta feel for those people, taking their lives in their hands in that Hell hole.

    1. Sher

      Agreed! I also feel that restrictions should be introduced to even be allowed to get a Uber ride . Innocent ppl trying to make a living sacrifice their lives for a little pay wage .

Comments are closed.

Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]