The future of rideshare services after COVID-19

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The pandemic has altered almost every conceivable “norm,” from working from home to shopping with a mask. The rideshare industry has been particularly impacted, with once-regular riders no longer needing transportation to and from the airport, meetings and social events.

Before COVID-19 upended the way we live, Brooklyn-based writer Aly Walansky was a self-described UberPool “addict.” She would use Uber’s carpooling service — in which she would share a ride with a few extra passengers heading in the same direction— two or three times a week.

“Part of my job is dining and drinking,” Walansky says. “I felt safer at night after a few drinks to take an Uber home, rather than taking the subway and then doing the 10-minute walk home alone.”

Then the pandemic hit. Even without her own car to get around, she hasn’t booked a ride with Uber since March. Not surprising, perhaps, since the coronavirus has crushed the travel and entertainment industries as cities nationwide shut down nonessential activities and social distancing became a way of life.

Both United States rideshare giants — Uber and Lyft — have reported double-digit year-over-year declines in ridership. And a new CarGurus survey suggests that the fear of hopping into a rideshare driver’s car may not change even when more typical economic activity resumes.

Read on to learn how rideshare services are faring, what the companies are doing to survive and what the future may look like for these services.

The future of rideshare services and transportation post-pandemic

In its second-quarter earnings release, Uber Technologies announced that its gross bookings declined 35 percent and revenue declined 29 percent year over year for the period ending on June 30. In a filing with the SEC in May, the company revealed plans to reduce its workforce by 3,700 full-time employees, and CEO, Dara Khosrowshahi agreed to forgo his base salary for the remainder of the year.

Though ride requests were down, the company experienced growth in Uber Eats, its food delivery division. As of June, more than 500,000 restaurants had signed up to participate worldwide, up 50 percent from a year ago. And while Uber’s second-quarter 2020 “mobility,” or ride, revenue was off 67 percent compared with a year ago, its “delivery” revenue rose 103 percent thanks to Uber Eats, its earnings release said.

Similarly, in the quarterly earnings call on May 6, Lyft CEO Logan Green told participants that in April, rideshare rides were down 75 percent year over year. In April, Lyft launched Essential Deliveries, a pilot program to allow drivers to perform contact-free deliveries of groceries, meals, medical supplies and necessities for rates similar to passenger rides. Still, the company implemented layoffs and furloughs of 1,300 team members and other cost-cutting measures beginning in May.

The ridesharing business is expected to continue to struggle, according to a survey by CarGurus, the global online automotive marketplace.

When economic activity resumes, 28 percent of respondents said they expect to use taxis or ridesharing services less, and 11 percent expect not to use the services at all, according to CarGurus’ “US COVID-19 Sentiment Study,” released in July. Among those who are planning to decrease this usage, 49 percent said they plan to increase the use of their personal vehicle. (Plan to drive more frequently or change your usage habits? Make sure you have the necessary car insurance coverage.)

The change in driving behavior may be good for car dealerships and resellers: the CarGurus survey also found that 26 percent of respondents plan to replace their current vehicle and 17 percent intend to purchase an additional vehicle for their household.

Tips to keep drivers and riders safe during and after COVID-19

Health and safety are top of mind for both drivers and passengers who rely on rideshare services. Many companies have implemented new cleaning and behavior requirements. Lyft’s new Health Safety Program requires anyone in a car to self-certify that they are symptom-free of COVID-19 and wear a face mask. It’s also providing cleaning supplies and masks for drivers and offering health safety education. Uber also requires riders and drivers to wear masks, and in June, it launched a pilot partnership with disinfectant brand Clorox to provide wipes to drivers to be used to disinfectant the vehicle between customers.

In addition to these new company-mandated processes and requirements, individuals should also follow other precautions to keep themselves and others safe. The CDC urges both drivers and passengers to stay home if they’re feeling sick, wash hands before and after each ride, avoid touching their face and unnecessary items (like in-car magazines or water bottles), and regularly clean and disinfect hard, nonporous surfaces. For additional guidelines, visit the CDC’s COVID-19 page dedicated to rideshare, limo, taxi and ride-for-hire drivers.

The bottom line

With significant numbers of COVID-19 cases remaining around the world, economic uncertainty and continued concern, only time will tell what the future holds for the rideshare industry and whether it will get back to its pre-pandemic ride volume. Though big industry players are making changes to their business models, such as providing food delivery, and ramping up programs to increase rider confidence and keep drivers busy, some consumers remain tentative.

“It doesn’t feel safe from a germ perspective,” says Walansky, who adds that she might wait until a viable COVID-19 vaccine is available to start riding with Uber again. “I miss it, but I’m just not ready.”