Uber on Wednesday announced a $ 250 million driver incentive package aimed at encouraging new employees as the company faces a shortage of drivers following the pandemic.
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Dennis Cinelli, Uber’s vice president of US and Canada Mobility, said in a blog post on Thursday that the rideshare app lost “many drivers” in the middle of COVID-19 in 2020, and now there are more riders requesting rides than there are drivers available to make them.
“The $ 250 million driver incentive will go directly to drivers starting to drive again, as well as new drivers joining Uber,” said company spokeswoman Kayla Whaling. “The money will take the form of special bonuses and new guarantees. They will be in place for the next few months.”
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Whaling provided several examples of how the individual bonuses and new guarantees would work. In Austin, Texas, drivers would receive $ 1,100 after making 115 trips; in Phoenix, drivers earn $ 1,775 when making 200 trips; and in Miami, drivers get $ 1,750 when drivers complete 185 trips.
The goal of the stimulating money is to “welcome” existing drivers and encourage new drivers, Cinelli wrote.
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Cinelli shows median hourly wages for Uber drivers – before tips, Uber service fees and driver expenses – as $ 31.03 in Philadelphia, $ 28.73 in Chicago, $ 26.66 in Austin, $ 26.05 in Miami and $ 25.94 in Phoenix.
But drivers’ earnings fluctuated during the pandemic. A driver told Business Insider in April 2020 that he earned only $ 2.50 an hour despite earning nearly $ 200 an hour before the pandemic due to lack of demand. Uber classifies its drivers as independent workers, so they are not entitled to the minimum wage and other health benefits that regular full-time employees receive.
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Uber and the rideshare app Lift took significant hits during COVID-19, as telecommuting as well as fears of viruses and enclosed spaces caused a marked drop in demand for riders. Both companies implemented mandatory masking for drivers and drivers as well as other safety measures early in the pandemic to prevent transmission of the virus.
Uber’s delivery business kept the company profitable in 2020, according to the earnings call for the fourth quarter in February. Uber Eats rose 130% in the quarter, while its ride-hail unit fell 47%. The delivery company withdrew DKK 10.1 billion. Dollars compared to 6.78 billion. Dollars for the riding greeting in the fourth quarter. Uber’s net loss for the quarter was $ 6.77 billion, a 20% improvement from its $ 8.51 billion loss in 2019.
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Uber CEO Dara Khosrowshahi reiterated several times during his call to analysts in February that he was “optimistic” that the company’s ride-sharing business would “start growing” again, but expressed concern that Uber did not have “enough drivers to to meet the demand we are going to have. “
By 2020, Uber paid over $ 22 billion to drivers and delivery workers.
Fox Business’ Lucas Manfredi contributed to this report.