Uber drivers say the job has become more competitive — and that it's made their work less profitable


Ride-hailing has been perceived as less profitable by many Uber and Lyft drivers, and some attribute this to the increasing popularity of gig work. Fred, a part-time Uber driver in Virginia, noted a decrease in his earnings by over 25% in 2022. He observed a larger pool of drivers waiting for rides, which has led to fewer available and lower-paying trips. This increase in drivers has been further evidenced by Uber's announcement of a record 6.5 million active drivers and couriers in November 2023, reflecting a 31% increase from the previous year. Lyft also reported its highest number of active drivers in over two years.

The spike in driver numbers can be attributed to various factors, including elevated inflation prompting more people to explore gig opportunities like ride-hailing, as well as reduced COVID-19 concerns contributing to renewed interest in the gig economy. A significant decrease in active Uber and Lyft drivers was observed between January and April 2020 due to pandemic-related health concerns, creating a driver shortage that persisted through 2021. During this period, drivers who continued working experienced higher fares, wages, and more generous customer tips. However, with the resurgence of driver supply and a potential decrease in tipping, the landscape has shifted.

Complaints from drivers about changes to platform algorithms impacting their pay have surfaced, alongside a sentiment that increasing competition is not the sole factor affecting drivers' earnings. This sentiment is echoed by Rich, an Arizona Uber driver, who highlighted the challenges of maintaining previous earning levels due to the recent influx of drivers.

Uber's perspective contrasts with that of drivers, as the company emphasized that growing customer demand has helped offset the increase in driver supply. The company reported significant year-over-year growth in monthly active platform consumers and trips, with the median US driver's earnings per utilized hour, including tips and incentives, increasing nearly 30% over the last six years.

In terms of maximizing earnings, some drivers have found success in working during less busy periods. Fred starts his workday at 3:30 a.m., while Rich mentioned commencing work as early as 4:30 a.m., providing an alternative strategy to mitigate the impact of rising competition.  

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