Following an 80% decline in business last year, Uber executives are anticipating an upcoming surge in demand for rideshare business. On Wednesday, Uber announced the launch of a $250 million stimulus to retain and recruit drivers. The company will roll out these payments in the next few months in the form of incentives. From this, Uber hopes to welcome back old drivers while also ensuring the success of new drivers.
Uber’s new incentive structure will be based on factors such as individual activity and location. For example, drivers in Austin are guaranteed a bonus of $1,100 if they complete 150 trips. Drivers in Miami can expect to receive $1,750 if they complete 185 trips. However, as more drivers return to work these higher earnings could drop, implying a stronger incentive to join now. “We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels,” the company announced.
The recent announcement faced scepticism by drivers who experienced financially devastating impacts due to the COVID-19 pandemic restrictions. In fact, drivers who made $20 an hour pre-pandemic reported to Business Insider that their earnings dropped to a drastic $2.50 an hour. In order to receive the stimulus, drivers need to hit certain ride amounts or income thresholds. This means that drivers will have to increase their risk of contracting COVID-19 by being in close contact with a target number of riders. Gig Workers Rising commented on the issue by suggesting that Uber should be providing PPE, higher wages, paid sick leave and driver protection instead.
Uber’s share price closed down 2% following the announcement.
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