Onset of the COVID-19 coronavirus has Uber, Lyft drivers struggling, put companies in jeopardy

AKRON, Ohio – For years, Ryan Isley worked full time driving for rider-sharing services Uber and Lyft in Greater Akron and Kent, earning as much as $300 a night and enjoying the people.

But the onset of the coronavirus crisis brought an end to the good pay and the good times. The companies stopped awarding bonuses, ridership dwindled and his concerns about the virus heightened.

Isley told cleveland.com he finally quit after getting three calls for rides in late March, all from people who had attended large gatherings, including a “coronavirus bonfire.”

The full impact of the coronavirus on the ride-sharing services in Northeast Ohio is difficult to gauge because no agency tracks people such as Isley, who walk away from the business.

But a recent national survey of drivers and reports from analysts suggest the industry is in trouble because of the pandemic and might be unable to recover until a vaccine is discovered.

How bad is business?

Ridership earnings were up early this year and drivers reported they, too, were making more money as recently as early March, a survey by Ridester, an industry researcher.

But once the economy began locking down to try to slow the spread of coronavirus, bookings collapsed. Drivers said they had lost as much as 90% of their business.

This week, Uber announced it would lay off 3,700 workers from its customer-support and recruiting teams, about 14% of its total workforce. Uber CEO Dara Khosrowshahi waived his salary for the remainder of the year, the company said. He made $1 million in 2019, plus bonuses.

Last week Lyft took similar action, announcing it would lay off 982 workers, about 17% of its workforce, and furlough nearly 300 more. It also announced pay cuts of up to 30% for executive leadership.

What about drivers?

Isley’s experience mirrors what Ridester found in a survey of 170 drivers late in March. The survey results were released this week.

Drivers said that when bonuses were included, they had been making more than $18 an hour early in March, up from just under $15 an hour that they were getting at the end of 2019.

Then the shutdowns began.

By the end of March, drivers were reporting earnings of less than $9 an hour, with many saying they had trouble paying for gasoline for their cars.

Seventy-four percent said they were getting less than half the rides they had before the coronavirus crisis. More than 70% said they were planning to quit or cut back their driving hours. More than 20% said they were concerned for their health.

Can the industry survive?

Daniel Ives, an analyst at Wedbush securities, said as long as people are wary of getting close to strangers, gig economy companies like Uber and Lyft will struggle.

“Until there is a vaccine for the virus, the next one or two years is going to have some darker days ahead for these business models,” he said in an interview with The Guardian.

Where did Isley land?

For now, he is driving for DoorDash, delivering takeout food.

But once the economy reopens, he expects takeout deliveries will diminish and the demand for Uber and Lyft will pick up. If so, he probably will go back to work for the ride-sharing companies.

“I loved interacting with people,” Isley said. “I was able to make decent money.”

Before switching back, however, he plans to learn more about the virus and weigh the risks of becoming infected by someone riding in his car.

“You get to a point where you have to consider your personal safety,” he said.

More coronavirus coverage

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