“Ultimately, the power of Uber is the six-and-a-half million earners who are on our platform and the services they provide for everybody.” Those were the words of Uber CEO Dara Khosrowshahi, as reported by Business Insider, at an appearance in Bengaluru, India, in February of this year. Khosrowshahi mirrors what many CEOs say: “Employees make the company.”
As Khosrowshahi spoke these words, the Gridwise Annual Gig Mobility Report revealed other news about gig economy trends. Uber and Uber Eats led the downward curve in gig driver earnings in 2022 and 2023. For rideshare, Uber drivers’ monthly income dropped 17.1% in the last two years. Uber Eats drivers saw a drop of 15.4%.
For investors and analysts it’s essential to understand the importance of drivers to the success of a gig platform. We’ve all experienced having to wait twenty minutes for a rideshare or even longer for a meal to be delivered. Part of that problem is not enough drivers. If you want to understand gig drivers, the Gridwise Annual Gig Mobility Report is the best place to start. Download your copy here.
Here's what we cover:
How did Gridwise Analytics gather this information?
Gridwise markets a companion app for gig drivers: rideshare, food delivery, grocery delivery, and parcel delivery. The app gives drivers various insights into their earnings—when and where to drive, information on special events, traffic reports, weather reports, etc.—allowing them to be more efficient in their work. More than 650,000 gig drivers in the US have downloaded the Gridwise app, linking it to the various gig apps they work with.
In addition to helping gig drivers earn more, Gridwise captures driver information—where rides originate, where they end, time of day, driver earnings—then anonymizes and aggregates it into mobility and delivery data. These transportation analytics reflect activity across twelve gig platforms, correlating up to 98% against quarterly metrics reported by these platforms.
For the Gridwise Annual Gig Mobility Report (AGMR), researchers interviewed 528 US-based gig drivers from November 27 through December 19, 2023. Gridwise also interviewed another 1,000 US-based gig consumers on January 19, 2024.
Unless otherwise noted, all numbers in this blog post are from the AGMR.
The ecosystem of gig driver platforms
We can generally divide gig platforms into four categories.
- Rideshare. Uber and Lyft are the leaders in ridesharing, with market shares of 65% and 35%, respectively.
- Food delivery. This market is dominated by DoorDash, with a whopping 78.6% market share. Uber Eats is second (18.7% market share), followed by Grubhub (2.7%).
- Grocery delivery. Instacart dominates this market at 72.5%. According to a report by EMarketer, DoorDash, Uber, and Shipt make up the market’s remainder of the market. Walmart has its own proprietary gig driver delivery service called Walmart Spark.
- Parcel delivery. Several companies share this market, including Amazon Flex (Amazon packages only), Roadie, and other smaller platforms. At various times rideshare drivers are also called upon to deliver items. One former Lyft driver reports he once delivered blueprints, car keys, industrial parts, and hair products.
Uber is credited with founding and popularizing the gig industry with rideshare in 2012, followed quickly by Lyft. Food delivery and grocery companies promptly followed. Although rideshare grew in popularity, food and grocery delivery platforms stumbled along until the pandemic in 2020; then they skyrocketed as people quarantined in their homes. Meanwhile, rideshare took a hit. Four years later, rideshare has recovered, while food and grocery delivery continue their popularity.
Growth of the platforms
The Uber rideshare platform saw the most significant trip bump in 2022 and 2023, with a 66.3% increase. Lyft trip numbers also increased by 52.1% in the same period.
DoorDash experienced solid growth in food delivery, with a 34% increase during the reporting period. The platform now dominates the market with a 78.6% share. Uber Eats orders are slightly down. Their market share has shrunk to 18.7%, but food delivery is a significant part of Uber’s income.
Gig driver preference for platforms
- Food delivery has surpassed rideshare in the last 12 months, with 76% of drivers saying they’ve worked the food delivery platforms.
- Grocery delivery came in second, with 32.2% of drivers working these platforms in the same period.
- Rideshare came in third, with 28.8% working on these platforms.
As many as 41% of drivers work multiple platforms, a practice called multi-apping. Drivers work platforms simultaneously or one at a time, depending on the peak hours of individual platforms. More about that later.
If you want a closer look at the companies that employ gig drivers, get your copy of the Gridwise AGMR. Download your report today.
Gig economy workforce earnings
Here is a review of gig drivers’ monthly earnings on the various platforms for 2022 and 2023.
What role does tipping play for the gig economy workforce?
There is a marked difference in tipping for drivers on the different gig platforms. Food and grocery drivers earn more than 50% of their income from tips, while rideshare drivers earn only about 10% of their income this way.
There is also a difference in tipping frequency on the various gig platforms:
- 28.3% of rideshare trips result in a tip
- 74.5% of grocery delivery trips result in a tip
- 88.5% of food delivery trips result in a tip
Of the drivers surveyed, 78.4% say tips matter significantly to their overall income, while 68.6% claim that tips bolster their enthusiasm and job satisfaction.
Consumers of gig driver services are surprisingly aware of the importance tipping plays in gig driver income. Of those surveyed, 76.4% recognize that gig drivers rely heavily on tips, and 58.5% feel obligated to tip gig drivers.
However, there is a clear difference of opinion about the amount suitable for a tip.
SOURCE: Gridwise Analytics Annual Gig Mobility Report
What has caused the drop in gig driver earnings?
While Uber drivers monthly income showed a marked decline, this isn’t true for all the platforms. Lyft rideshare and Grubhub are up 2.5% and 6.0%, respectively. We can, however, make some general observations about why earnings are down overall.
- Oversaturation of drivers. In a previous Gridwise blog post, How Much Do Uber Drivers Make In 2024?, we reported that the ranks of Uber gig drivers swelled by 31% in 2022. This means two things:
- More drivers are competing for rides, driving down individual earnings. You’ll often hear this referred to as an oversaturation of drivers.
- New drivers who are not familiar with rideshare strategies tend to make less.
- A more savvy rideshare consumer. Passengers are getting smarter. Many have figured out that waiting fifteen minutes after the bars close or an event lets out allows surge prices to pass. Articles such as this one in The Penny Hoarder inform rideshare passengers of other techniques to save money on rideshare.
- Gig platforms are still tweaking formulas. Uber’s profit report puts pressure on the other companies running gig platforms to show black ink. Platforms will continue experimenting with how much they charge the consumer and pay gig drivers.
Gig earnings will continue to fluctuate as these factors and others put pressure on the market. To get a better look at gig companies' earnings, have a look at the Gridwise Annual Gig Marketing Report.
Gig economy workforce demographics
According to a study from the Pew Research Center, in 2021 more than 16% of the US population had at least experimented as a member of the gig economy workforce, either in rideshare, food delivery, or package delivery. This includes those who work just a few hours a week to full-time drivers putting in 40 to 60 hours a week. That Pew number, by the way, was compiled before Uber swelled its US driver numbers by 31% these last two years.
More recently, Gridwise Analytics has compiled demographic information on these drivers.
The gender breakdown of the gig economy workforce
The Gridwise Annual Gig Mobility Report breaks down gender into the four main gig platform categories.
- Rideshare: 25% women, 72% men
- Food delivery: 40% women, 59% men
- Grocery delivery: 43% women, 54% men
- Package delivery: 33% women, 65% men
The survey also revealed that women are twice as likely as men to be concerned about the safety of having a stranger in their car. This explains why food and grocery delivery see a higher percentage of women drivers.
How did drivers define the commitment level to their gig job?
- 68% considered it a side job
- 41% drove less than 10 hours a week
- 31% considered it their primary job
- 29% drove 10–30 hours a week
- 8% stated they drove more than 30 hours a week
Longevity of the gig economy workforce
Driver churn, the term referring to the number of drivers who leave the job, is a problem for gig platforms. According to the Gridwise Annual Gig Mobility Report
- 74.8% of drivers started in the last three years
- 49.4% started in 2023
- 38% work five times a week or more
FintechNexus.com reports that “the cost of turnover is estimated to be 0.5 to 2 times the employee’s earnings, even for a gig worker.” This is a drain on the bottom line for the gig platforms, requiring these firms to spend money and resources on recruiting drivers.
The Gridwise Annual Gig Marketing Report is a complete look at gig drivers, their demographics and motivations. Get your free copy here.
Other factors that contribute to those seeking gig driver work
There are also societal factors that make gig work attractive to individuals who previously worked 9-to-5 jobs.
- The Great Resignation. The COVID-19 pandemic compelled a number of workers to re-evaluate their jobs and lifestyles. Folks quit working in droves, looking instead for jobs that offered more flexibility and freedom. Gig-driving jobs provide these things. The money may not be as good, but many people have re-prioritized their lives.
- The aging of baby boomers. The children of baby boomers, Gen Xers, and Millennials find they must care for their aging parents as they encounter the infirmities of old age. Alzheimer's and other forms of dementia are at record highs. In 2020, there were over 55 million people globally who have dementia, according to the website of Alzheimer’s Disease International. “This number will almost double every 20 years, reaching 78 million in 2030 and 139 million in 2050. Much of the increase will be in developing countries.” The children of these patients need jobs with flexibility to accommodate their caregiving activities, and gig driving offers that flexibility.
How do drivers see their future working on a gig platform?
According to the 2023 Griwise AGMR, 45% of drivers see their commitment to gig driving as a long-term plan instead of a temporary job. Another 26% see it as a short-term remedy to their job situation. Finally, 29% say they are unsure about their work as a gig driver.
What role does multi-apping play with drivers?
A common practice for many drivers is multi-apping, in which drivers run two or more apps simultaneously. According to the Gridwise AGMR, only 24.3% of drivers switch between apps during a working period, but there’s plenty of curiosity about this practice. Of those drivers interviewed, 41.7% have experimented with the various gig platforms in the last year. Many drivers find the information they get from the Gridwise app allows them to multi-app more efficiently.
Gridwise Analytics has the ground truth
One of the keys to success for investing in gig platforms, especially the emerging ones, will be understanding the drivers who deliver these services, whether it’s rideshare, food delivery, package delivery, or any other service that may develop in the coming years. Successfully recruiting these drivers means having an insight into what motivates them. Gridwise Analytics, with insights into the activities of hundreds of thousands of drivers, can deliver that insight.
Get in touch with us today to discover what we can deliver.
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