Uber and Lyft recently reported first quarter earnings for this not-so-normal year of 2020 and surprise! Both companies lost more than a billion dollars with Lyft losing $398 million and Uber losing a whooping $2.9 billion.
Unfortunately, these losses have resulted in both companies laying off a substantial amount of their workforce as Lyft laid off nearly 1,000 employees, or about 17 percent of its workforce and Uber laid off or furloughed 3,700 workers, primarily in customer service and HR roles.
We also found out just how bad the COVID-19 affected the rideshare space as Both Uber and Lyft say that at its worst, rides were down 80% across the US.
BUT… Both companies have started to see signs that the COVID-19 slump has reached it’s bottom and rides are picking back up.
Uber says the week ending May 3, 2020 brought 9% growth in trips and a 12% rise in gross bookings nationwide, while Lyft noted an increase of 13% from April 5 to May 3. The gains are small, so no one’s claiming that earning potential is back to normal in every market. After all, Lyft says rides are STILL down 70% from a year ago.
But it does look like we’re s-l-o-w-l-y coming out of the woods. After Uber and Lyft acknowledged that business bottomed out during the month of April, they’ve both reported growing ridership since then. Uber says it expects that week ending May 10th will be it’s 4th consecutive week of growing overall ridership.
People are starting to slowly venture out again, and some cities and states are allowing more businesses to reopen.
But this begs the question, if ridership is, in fact, on the rise in some localities, can drivers expect to see their earnings rise back to pre COVID-19 levels?
National earnings have been rebounding… but why?
Gridwise leverages the anonymized earnings data of more than 110,000 rideshare and delivery drivers to understand how much drivers are making at any given time. We also survey our userbase frequently to get a better understanding of why earnings are fluctuating as they do.
What we’ve learned over the past week is that the national median driver earnings per hour is in fact increasing. See the week by week breakdown of national driver earnings below:
National Driver Earnings Amid COVID-19 (Weekly)
| 12/30/2019 | $17.31 |
| 1/6/2020 | $15.62 |
| 1/13/2020 | $16.67 |
| 1/20/2020 | $16.19 |
| 1/27/2020 | $16.48 |
| 2/3/2020 | $17.40 |
| 2/10/2020 | $18.21 |
| 2/17/2020 | $18.00 |
| 2/24/2020 | $19.36 |
| 3/2/2020 | $18.29 |
| 3/9/2020 | $16.31 |
| 3/16/2020 | $12.35 |
| 3/23/2020 | $13.37 |
| 3/30/2020 | $14.76 |
| 4/6/2020 | $15.10 |
| 4/13/2020 | $16.45 |
| 4/20/2020 | $16.55 |
| 4/27/2020 | $17.19 |
| 5/4/2020 | $18.22 |
While driver earnings were at an all time low at $12.35 per hour before taxes and expenses, earnings have been steadily increasing for 7 straight weeks all the way up to $18.22 per hour the week beginning May 4th, 2020.
I’m sure these numbers don’t jive with the earnings numbers that A LOT of drivers are seeing right now, but it’s important to understand why these numbers are what they are right now.
Most drivers are not on the road
In an effort to understand these numbers better, Gridwise conducted a study of 1,209 rideshare and delivery drivers on May 6th, 2020. We found that 57% of drivers have completely stopped driving while another 14% have completely stopped driving and switched to food and grocery delivery.
Just 11% of drivers report that they are still driving as much as they did before the COVID-19 pandemic.
All of this information leads us to believe that driver earnings are increasing for drivers that are driving because the demand is simply higher than the supply of drivers.
Inner-city movement is picking up
As driver supply seems to continue to decrease, demand has been picking back up.
Lyft and Uber have said that their rides are increasing week over week from their abysmal bottoms, but we can also look at independently collected data to understand how people are starting to move again in their cities.
Apple’s mobility trend data gives us a great view of how people are starting to move in their cities once again.
As you can see, people are slowly returning to more normal movement patterns with people both driving and walking more and more each day.
What’s also interesting is that you don’t see public transportation usage increasing nearly as much as driving or even walking. This could mean that rider demand will increase even faster as potential passengers try to avoid the masses and public transportation.
Certain markets are picking up faster than others
The increase in income drivers are starting to notice is largely dependent on where they’re located, and to what degree the area is still locked down. A few states, as you probably know, have begun to open back up.
Texas
Texas, one of the first states to reopen, saw a surge of 50% in Uber ridership for the week ending May 3. That same week, Lyft noted that rides were up in Houston by 39% compared to where ridership was on April 5. Earnings in both Dallas and Houston seemed to rally in March and appear to be on a positive, though bumpy, trajectory.
When we look at Apple’s mobility trends for the entire state of Texas, we can see that earnings are roughly following a similar trajectory.
Georgia
In Georgia, another early reopening state, Uber rides were up 43% by the week ending May 3, and Lyft’s rides increased 35% from April 5 to May 3. In Atlanta, we can see median driver earnings bouncing back all the way beyond their peak from 2020 to $17.83 per hour the same week that the state reopened.
When we look at Apple’s mobility trends for the entire state of Georgia, we can see that people are certainly starting to move again at a similar trajectory.
Los Angeles
As California took its first steps out of COVID-19 isolation, Uber noted a quick uptick in business. There was 8% growth in San Francisco, and a 10% increase in the Los Angeles market for the week ending May 3. In Los Angeles we’ve seen driver earnings increase to near pre COVID-19 levels as earnings have reached a median of $17.76 per hour.
Apple’s mobility trends, again, show a significant uptick in overall movement within the city.
New York City
Even in places that are still largely locked down, there seems to be a change in rider behavior. New Yorkers, who have been astoundingly well behaved about staying put, seem to be venturing out again. The evidence of this can be seen through gains experienced by Uber (14% increase for the week of May 3) and Lyft (22% growth from April 5 to May 3). Here you can see the dip in ridership hitting bottom at the end of March, and earnings are almost all the way back to Pre COVID-19 levels at $21.14 the week beginning April 27th, 2020.
Apple’s mobility trends don’t indicate a gigantic uptick in movement, but movement is certainly gradually increasing.
Chicago
The inhabitants of Chicagoland are also starting to call for rideshare more often. Uber noted gross bookings up by 11% for the week ending May 3, and Lyft saw ride volume rise by 29% from April 5 to May 3. Driver earnings have seen a recovery to $17.15 per hour for the week beginning April 27th, 2020.
In Chicago, overall mobility trends are similar to those in NYC. Changes haven’t been gigantic, but they have been occurring.
Seattle
Seattle, the area that got struck first and really hard by the coronavirus, showed a 25% rise in ride volume from April 5 to May 3, according to Lyft. Our earnings figures show earnings have eclipsed their 2020 high of $22.26 with a median earnings per hour of $22.64 during the week beginning May 4th, 2020.
In Seattle we can see a huge uptick in the number of people driving when we look at Apple’s mobility trends.
The rideshare world is turning in a positive direction
Again, we know driver earnings aren’t going to come back up as fast as they went down when this whole crisis began. But there is an upward trend for which we can be grateful, and we can begin to look forward to even more business in the future.
Hope lies in the observation that riders are coming back, and there are signs that rideshare will be a robust business again. Even if the big companies are the only ones to feel the difference so far, it’s good to know our beloved ride-for-hire gig economy is showing signs of reanimation.
Another encouraging point to remember: In cities like New York and Chicago, where public transportation is normally packed with passengers, COVID-19 fears could send erstwhile strap-hangers flocking to rideshare when they slowly emerge from lockdown. And if (when) that happens, business for Uber and Lyft drivers in big cities could be better than ever.
Will driver earnings continue to increase?
While driver earnings have been steadily increasing, and we do expect earnings to increase for a bit more, at some point earnings will start to level off as more drivers are out on the road.
The big reason that driver earnings are picking up is because the demand for rides is simply outpacing the supply of drivers. So as drivers begin to see that others are making more, they will get back on the road and earnings will likely level out.
We may see this happen sooner rather than later as many drivers report they are having trouble receiving unemployment benefits. Our latest data shows that only 33.62% of drivers that have filed for unemployment benefits have been approved thus far.
What can drivers do to make money as this process unfolds?
The outlook for a rebirth of rideshare is promising, but we still have a way to go. In most cities businesses will open in stages, slowly allowing more and more people to go to work. Eventually, people may even be allowed to have fun meeting at restaurants, bars, concerts, and ball games!
But that time isn’t here yet. And until it arrives, drivers need to have realistic expectations about rideshare, and look for other ways to make money in the meantime. What can you do when you try driving and there still aren’t enough riders, or the trips are too few and far between?
There’s always … delivery! According to Uber’s May 7, 2020 earnings report, “Nearly 40% of U.S. and Canada Drivers active on the platform cross-dispatched to [Uber] Eats in the month of April.”
And in case you haven’t heard, other delivery companies like Instacart and Doordash have been crushing it during the COVID-19 crisis. Check out this article to read a driver’s first-hand report on what it’s like to deliver for Postmates. And in this article you can find out just how hot the earnings can be working for Instacart.
It’s easy—and justifiable—to feel discouraged about how hard it is to make a living from rideshare driving since COVID-19 hit. But try to remember that, as horrible and difficult as this crisis has been, it won’t last forever and things are starting to look up.
Be confident, stay hopeful … and keep working!
As long as you’re not a high-risk individual, or you won’t expose a high-risk person to anything you might bring home from your rideshare or delivery work, there is work available to you.
Gridwise has you covered when it comes to keeping your stats, too. You can enter all the platforms you work with on the Gridwise app, and it’ll calculate your total earnings, mileage, your hourly wages, and all the information you need to manage your gig work, so you can keep earning from as many sources as possible.
We’re always interested in hearing about what you discover, so comment below to share it with your fellow Gridwise peeps. In the meantime, we’ll continue to monitor the rideshare world, so if you haven’t already done so, download the app to make sure you won’t miss a thing.
