Is rideshare on the rebound? Lyft says yes—but what about driver earnings?

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Can you feel it?

As more states start to open, and people regain their courage to emerge from their homes, rideshare drivers have begun to notice a definite uptick in business. 

Restaurants and bars, albeit with limited capacity, are greeting customers once more. Many schools and universities are in session, with students and faculty looking for rides to and from their activities. 

Even some workers are returning to the office.

There’s no doubt we all took a hit during the COVID-19 peak period, and we’re not back to normal yet. But many drivers are noticing a greater demand for rideshare, and improving earnings.

Lyft has recently confirmed our suspicions that rideshare is rebounding, and we’re using our data to track what’s happening with driver earnings.

In this blog post, we’ll cover:

  • What Lyft is saying about rebounding passenger demand
  • How much earnings have bounced back
  • How rideshare driving has changed, and where are the rides?
  • Why more drivers are getting back on the road
  • What will happen next?

What Lyft is saying about rebounding passenger demand

In a September 8, 2020 financial report, Lyft provided the US Securities and Exchange Commission with an in-depth update on its business activities. 

Lyft reported that during the first two months of the third quarter, rides on its rideshare platform were down more than 53 percent compared with the same period in 2019. In April, Lyft reported rides were down more than 80 percent when compared to the same period in 2019.

Lyft also reported that during the week ending September 6, 2020, rideshare rides reached a new high since April.

Also in the Lyft report: While recovery trends vary based on a number of factors, the company’s rideshare operations in Canada have been recovering more quickly than in the United States. For example, during the week ending September 6, 2020, rideshare rides were only down 20% year-over-year in Toronto, while weekly rides in Vancouver reached a record all-time high.

Based on what Lyft included in the report, it appears that trends are moving in the right direction.

That is progress … but is it for real? 

How much earnings have bounced back

According to our Gridwise data, the story is encouraging. For instance, looking at the median income per hour for rideshare drivers, we can see an upward trend setting in over the summer months and into September:

It’s interesting to note that in our sample, the earnings per hour for rideshare drivers are higher now than before the pandemic started. 

At the very least, this indicates that there’s still customer demand for rideshare. While it’s true that Uber has been laying the surges on thick to attract more drivers and lure them back to work, the earnings numbers wouldn’t be there if the passengers were not.

Probably the biggest factor boosting the earnings, even outside of surges, quests, and other premiums like those offered by Lyft, is a shortage of drivers. 

In an effort to understand these numbers better, in August 2020 Gridwise conducted a survey of more than 750 rideshare and delivery drivers. We found that 37.2 percent of drivers had stopped driving altogether, while another 12 percent had stopped driving rideshare and switched to food and grocery delivery.

Comparatively, a May 2020 survey of more than 1,200 rideshare and delivery drivers found that 57 percent had stopped driving altogether, while 14 percent had stopped driving rideshare and switched to delivery.

Driver earnings were on the rise between March and July simply because there was more passenger demand than driver supply. While passenger demand was rising, drivers were still not getting back on the road.

Now, we are seeing driver earnings stabilize because more drivers are getting back behind the wheel, but passenger demand is still steadily rising.

How rideshare driving has changed, and where are the rides?

So where are all the drivers? 

Many are still not back on the road, either due to fear of contracting the virus, or because they’re concerned about lack of business. 

After all, many restaurants and bars, staples of the night drivers’ passenger pool, are not yet open; and most that are open are only at 25 or 50 percent operation capacity. While the hourly earnings might be even better than back in January, the fact remains that the nature of rideshare driving has drastically changed.

Drivers may find they have to change their normal work hours. 

For instance, if driving at night isn’t going to work, then they’ll have to focus on the times of day that are busiest. These tend to be the mid- to late afternoon hours, when people are out shopping for food, and going to daytime appointments at the doctor, hair stylist, or physical therapist. 

Some business can be found in office and hospital areas, mostly where essential workers are coming and going. Many universities are back up and running, too, and students will often opt for rideshare over the cramped and most likely unsanitized milieu of public transportation.

The reality is, until more businesses are allowed to open, rideshare drivers will need to continue changing their routines and diversifying their operations. 

Many drivers who formerly dealt in rideshare alone have already converted to delivery, or have combined delivery with rideshare driving. While this is beneficial to the drivers, it probably cuts down on the number of drivers who are available for taking passengers from place to place.

For now, if you’re driving, you’re probably enjoying the nice, fat hourly rates we’ve shown in our data. But … what will happen when more drivers come back to work? Let’s see what’s keeping them home now, and how soon we can expect them to get back out on the streets.

Why are more drivers getting back on the road?

Why, a person might ask, would drivers go out to work if things are still shut down? 

The biggest motivation is money. While unemployment for independent contractors, plus a generous $600 per week supplement got many of us through the most dismal moments of the pandemic, that well has run dry. 

The supplemental payment is down to an additional $300 per week on top of regular state unemployment payments, and no one knows how long that will continue. It will probably be taken away entirely by the end of December 2020. There are some discussions stirring in Congress once again, but the outcome is uncertain.

On top of that, states have changed the conditions under which drivers can collect unemployment compensation. 

In many cases, you must be directly affected by COVID-19; i.e., you have it, you’ve been exposed to it, or you live with someone who is at high risk of dying from it. You can no longer get away with claiming that you can’t work at your rideshare job because there isn’t enough business.

One other likely reason drivers are cleaning up their cars and getting ready to drive again is they are running out of money. Even with the unemployment payments, full-time drivers are probably taking in far less than they’re used to. They might decide that their only option is to return to driving.

When more drivers go out, of course, there will be more competition for passengers.There may be an initial downward slide in hourly earnings, but it’s doubtful that this will last long. There are signs that people are growing weary of the lockdown situation. In Pennsylvania, for instance, a federal judge declared some aspects of the state shutdowns of non-essential businesses to be unconstitutional. 

The Big 10 college football conference has been cajoled into having a football season after all, and every day there are stories about more businesses opening, and more people coming back to their offices to work.

What will happen next is anyone’s guess. Provided there isn’t another wave of virus outbreak that’s big enough to crowd hospitals and panic the populace, our rideshare business may just be coming back.

So what’s business like for you? Are you driving yet, or not? Do your income figures come close to the earnings we shared from our data? Tell us in the comment section below; we always love to hear from you.

What’s next for drivers?

You’ll know a lot more about what you’re making, and from which app, when you download Gridwise and use our slick earnings and mileage tracking features.

On the Perks tab, you’ll find deals and discounts for drivers, along with quick links to our awesome blog articles, and the Gridwise YouTube channel.

Check us out on Facebook, too, and you can take part in the great Gridwise gas card

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