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Ridesharing apps face shortages as demand for drivers surges

Posted at 2:53 PM, Apr 23, 2021

As more states and cities ease COVID-19 regulations in businesses and sporting events, people are coming across one major problem: getting there.

There is a massive shortage of rental cars, and major rideshare companies like Lyft and Uber are offering heavy incentives for drivers so they can overcome their own shortages.

According to the International Organization of Motor Vehicle Manufacturers, production last year dropped 19 percent in the U.S. Some in the industry called it the worst crisis to ever impact the automotive industry.

The drop in cars led to a drop in rental availability. Models in rental company lots were older and they were scarce, and if you absolutely had to rent, prices were inflated.

All of those drops have led to a rise in profits for current ridesharing drivers like Uber and Lyft.

“Trying to stop for lunch is virtually impossible,” said Jerry MacKissock, who has been driving for a rideshare company since late March. “You’ve got two miles to go on your ride and they are dinging you to do another ride.”

Since MacKissock started, he says his weekly profits have steadily risen. In the week ending April 19, he says he earned $1,300 for driving 46 hours.

“It has been extraordinary,” said MacKissock. “The expectation was to replace the money I was making when I retired and it’s been three times that.”

It does not hurt that Uber and Lyft have promised massive incentives to overcome their own shortages. Drivers stopped driving because of slower pandemic business. which has not helped accommodate the 80 percent rise in demand Lyft reported last month and 76 percent rise in demand Uber reported.

To help meet the demand, Uber said it will spend $250 million in incentives to drivers to attract more.

“The $250 million driver stimulus will go directly to drivers who start driving again as well as new drivers who join Uber,” said Uber spokesperson Kayla Whaling in an e-mailed statement. “The money will take the form of special bonuses and new guarantees. It will be in place for the next several months. This is to help meet the returning rising demand, so we are reinvesting in bringing back drivers who are an essential part of their communities and have been vital in delivering food and goods, and helping get their cities moving again.”