Uber and Lyft acknowledge prices are up and wait times are longer, citing a lack of drivers; research found prices rose 37% from March 2020 to March 2021
The companies say they are charging extra because they don't have enough drivers to match rebounding customer demand.
New York TimesKate Conger
Context & Ripple Effects
Uber and Lyft had already shown how supply-side constraints can reach riders' bills: when New York City's driver minimum-wage law took effect, both anticipated higher prices in the related coverage. The companies now identify driver availability, rather than a local wage rule, as the constraint behind the widening gap between demand and available rides.
Uber and Lyft riders pay higher fares and wait longer as the platforms lack enough drivers to meet rebounding demand.
Uber and Lyft are immediately operating with constrained ride supply, using higher prices while trips cannot be matched as quickly.
Second-order effects
The March-to-March increase became part of a broader fare reset: later consumer-receipt data showed the pressure continuing into July 2021 rather than reversing as demand returned.
Higher prices can ration rides, aligning with the later YipitData finding that both companies had fewer riders and trips than before the pandemic even as average fares reached records.
Third-order effects
The related coverage identifies two distinct routes to the same outcome—New York's driver wage floor and a driver shortage—making labor supply a recurring determinant of ride-hailing prices.
If that pattern persists, Uber and Lyft's consumer pricing will be governed less by nominal app-based abundance and more by the cost and availability of the drivers who provide the service.
The trend: Ride-hailing is developing a capacity-lag premium, in which driver supply constraints translate directly into higher fares and reduced service availability.
An @Uber ride that's normally $25 cost me $90 not including tip, this weekend. ONE way. I had decided to Uber to dinner as I was going to have a drink. Most expensive drink I've ever had. https://www.nytimes.com/...
It's a gentle preview of the fact that absent massive, permanent investor-paid subsidies and offloading of the quick-depreciating capital-equipment purchase to the subprime-borrower drivers, the economics of cheap hire car rides do not work. https://twitter.com/...
Uber/Lyft join restaurants in not being able to entice workers to come back given pandemic benefits. This experience will harm the UBI pitch going forward since we've now seen people will leave the workforce putting more tax burden on those with jobs. https://www.nytimes.com/...
Remember, the drivers keep the majority of this pricing differential. So if you are paying these rates, you are helping the driver. Also, you can go drive ... 🤑 https://twitter.com/...
Uber & Lyft complain that they don't have enough drivers as customer demand rebounds Economist Heidi Shierholz: “We know how to attract workers—give them better jobs, better pay, better working conditions. It's not rocket science; that's how you do it.” https://www.nytimes.com/..…
This story pits consumers against drivers, blaming higher fares on drivers, precisely how Uber/Lyft would have scripted it. Alt take: This “labor shortage” is caused by Uber/Lyft's excessive take rates; a smaller take rate would increase driver supply. https://www.nytimes.com/...