The Gig Economy Dipped Again in the Fall. But How Bad Was It?

In a year unlike the epidemic, Roberto Moreno’s experience as a riding driver in San Diego reflected the fortunes of the companies he worked for.

In March, more concerned about getting sick than losing money, he stopped picking up passengers. In June, again as an epidemic in California, he went back on the road. But as soon as the coronavirus case number started climbing again, it closed it once again.

This week, the largest ride-hailing companies, Lyft and Uber, will announce their financial results for the past year, and they are expected to look like the roller coaster experienced by Mr. Moreno.

Investors are also expected to focus on signs of improvement this year, and whether Uber and Lyft – two of which are the most high-profile The initial Public offerings In recent years – the rest will be an indicator for the travel industry. And they are looking at Airbnb, which is expected to report its earnings in the coming weeks to hint at consumer spending patterns.

“Ride sharing is in the eye of the storm,” said Daniel Ives, managing director of equity research at Wesbush Securities. “Even though it has been better than expected, you have traveled between 50 and 60 percent with frequent lockdowns in cities and states.”

At the end of last year, the picture of the second recession for companies is becoming more clear. There is some good news: it was not thought to be as bad as before. Despite the lockout, people continued to travel. In Uber’s case, an aggressive chase Food delivery business Was paid

But the second decline was another setback to the expectation that companies, which have never made a profit and have historically incurred annual losses in the billions of dollars, could turn profitable this year. And drivers living on the road said their earnings were reduced because they had to pay more for safety devices such as masks and disinfectants.

The companies declined to comment on the business impact of the epidemic, citing a quiet period before earnings. Investors and analysts believe that companies are ready for recovery once the vaccine becomes widely available, and their stock remained high on Friday. Uber ended the day with 5 more dollars and lift by 53 percent and a rise of 155 percent from its lows last year.

Uber’s Ride, the core of its business, was down 80 percent in April, and about 53 percent in the third quarter of 2020, the most recent period for which it has released data.

To make up for its losses, Uber doubled on its food delivery service, Uber Eats, and acquired a competitive service, Postmates. In the third quarter of last year, Uber said its revenue from the food distribution business grew 125 percent. Last week, Uber also acquired very badly, Liquor delivery service, for $ 1.1 billion.

Uber also cut costs by leaving its money-losing businesses like its own Self Driving Car Unit, Which was intended to develop fully autonomous vehicles but burned at least $ 400 million a year. Analysts expect Uber’s fourth-quarter revenue to decline about 12 percent from a year earlier.

Lyft, which avoided expanding into food delivery, did not have a large distribution business to fall back on, although it said it would test a smaller program, some transportation “Essential” products Like medical supplies and groceries. Lyft recently said that the ride before April was down 75 percent and around 50 percent in November.

Analysts expect Lyft’s fourth quarter revenue to be down nearly 44 percent from its first year. The company said in a December regulatory filing that it would lose less than $ 190 million compared to the $ 190 million initially projected, causing more than $ 185 million in losses.

Another Tech Darling Airbnb, known publicly in December, also experienced a second dip. In the last week of December, usually a time for holiday travel, Airbnb bookings were 18 percent nationwide, according to Transparent, A vacation rental intelligence firm that tracks bookings on AirBnB and other services. An Airbnb spokesman declined to comment.

Many drivers who left the ride-hailing app in March are yet to return, worried about the risks of spending their days in cars with strangers. For those who have returned, work has become difficult.

Gig Wise, an earnings tracker service for Gig Workers, said driver earnings fell about 10 percent in November, a double dip that saw a 24 percent drop in the earnings drivers saw in March before recovering around the Christmas holiday Reminds me of And drivers are spending more time sitting in their cars, waiting for the next ride, while riders cut back tips, bitter cold Said.

But a spokesperson for Lyft said that in many of the company’s top 10 markets, driver earnings have increased. Because there are fewer drivers on the road during the epidemic, “people who are still driving are providing a greater share of the ride and therefore they are earning more while driving,” said Eric Smith, Lyft spokesman.

Some drivers said they were getting more selective about which rides they took, which are accepted, targeting higher-value rides and reducing shorter trips. Sometimes, this means searching for riders who were leaving illegal ceremonies.

“I know what I would consider super-spreader events,” said Ben Valdez, an Uber driver in Los Angeles. “A house party in Hollywood Hills or remote areas of LA – we actively seek these out because we can count on people paying top dollar to get out of there.”

Mr. Valdez created a plastic partition in his car to separate the front and rear seats. Despite the risk, Mr. Valdez said driving is worthwhile if he is able to secure a valuable ride. “I have the option to stay out of my credit card or go there and risk myself for money,” he said.

Although Uber and Lyft offer drivers some cleaning products and masks, Mr. Valdez, who spends between $ 40 and $ 60 a week on masks and sanitizing supplies, and other drivers who spoke to the New York Times said they They do not get enough supplies. They have to supplement whatever they get from Uber and Lyft with their purchases.

Uber said it distributed more than 21 million Masks and sanitizers for more than one million drivers and couriers in the United States and Canada and 3,726 riders have been banned for “repeated violations” of its policy requiring passengers to wear masks. Lyft said it provided more than half a million face masks, cleaning supplies and in-car partitions to drivers.

Many gig workers have migrated to delivery services such as DoorDash and Instacart, seeing it as a safer option than carrying passengers in their vehicles. Mr. Moreno, who runs a WhatsApp group for Spanish-speaking drivers in the San Diego area, said many of his group’s drivers distribute food as a safe alternative.

“You have more of a safety net from a delivery point of view. Do you opt for more security but less earnings, or do you take more risk and make more money because of that? “Ride Green, Chief Executive Officer of GridWise.” It’s a tough choice drivers have to make. “

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