Uber to spend $250m to coax drivers back onto the road

James Titcomb
·2-min read
Uber driver
Uber driver

Uber plans to spend hundreds of millions of dollars to encourage drivers in the US back on the road as it seeks to respond to rising demand as the world’s biggest economy reopens.

The cab-hailing app said it would spend $250m (£182m) on a “driver stimulus” that would include bonuses, minimum earnings for making a certain number of trips, and sign-up payments.

Government cash payments to Americans, boosted unemployment income and lingering concerns about the virus have meant Uber facing a shortage of available drivers, even as many passengers return to the app as restaurants and sports venues reopen.

Spending on Uber rides dropped heavily last year, falling by 50pc in the final three months of last year, although the company has benefited from higher demand for food deliveries.

The drop in demand means many drivers abandoning the service, at least temporarily.

Uber said on Wednesday that it was now suffering from a supply shortage. “In 2021, there are more riders requesting trips than there are drivers available to give them - making it a great time to be a driver,” the company said as it announced the package.

It said that in many cities, drivers were currently able to make significantly more than before the pandemic, pointing to median hourly earnings before expenses of between $25.94 and $31.03 in certain cities, before the company’s own extra spending.

It said the $250m would be used over the next few months, and that it expected supply to catch up to demand as the pandemic ceases.

Uber spent billions on driver incentives in its early days as it sought to dominate cities in competitive markets such as China, but had cut back as it sought to cut losses and break even.

Lyft, the company’s US rival, has also been increasing incentives in an effort to get drivers back on the road.

The stimulus applies only to the US. Uber recently announced that it would ensure drivers in the UK made a minimum wage and received other benefits such as holiday pay, after losing a years-long legal battle over the legal status of its drivers.