Mar 09, 2021 07:00:00

Why are Uber and Lyft drivers declining despite the pandemic recession?

People who register as drivers for ride-hailing and food delivery services such as

Uber and Lyft and get paid are called 'gig workers.' It has been pointed out that the number of such gig workers is decreasing as the infection of the new coronavirus spreads, and it is no longer possible to meet the ever-increasing demand.

Gig Companies Fear a Worker Shortage, Despite a Recession | WIRED
https://www.wired.com/story/gig-companies-fear-worker-shortage-despite-recession/

A 2018 study by American financial firm JPMorgan Chase found that people tend to register as drivers for ride-hailing and food delivery services when someone in their family loses their job and needs to make up for their income. doing. For this reason, Lyft, which expected an increase in driver registrants due to the recession caused by the spread of the new coronavirus infection that occurred in 2020, stopped accepting new driver registrations in May 2020.

However, according to a survey of the number of drivers for ride-hailing services before and after the pandemic by James Parrot, a researcher in economics at The New School, the number of drivers, which was about 82,500 in December 2019, was about 82,500 in January 2020. It turns out that the number has decreased to 47,600. In addition, the number of passengers using the vehicle dispatch service was halved.

WIRED , an IT news site, said, 'The driver of the ride-hailing service has unregistered for the service because he hated being infected with the new coronavirus or because his family had a high-risk occupation. I can think of it, 'he says, considering why the number of gig workers is decreasing.

In addition, WIRED cites the US government's economic measures as a major reason for the decline in gig workers. The US government provided cash benefits for the first time in April 2020 and for the second time in December 2020 as an economic measure against the recession caused by the spread of the new coronavirus. Furthermore, in March 2021, an economic measures bill including a third cash benefit was passed . In addition, the US government is implementing major economic measures, such as granting gig workers and freelancers the right to $ 600 a week in unemployment insurance.

According to a JPMorgan Chase survey , the US government's economic measures have increased the average household deposit balance in the summer of 2020 by 40% compared to the summer of 2019. 'Government economics have done a really good job of meeting the needs of workers, so it's amazing that the number of gig workers is declining,' said Fiona Craig, co-representative of JPMorgan Chase. That's not the case. '

According to WIRED, the number of orders for the American food delivery service 'DoorDash ' in the latter half of 2020 more than tripled from the latter half of 2019 due to the expansion of take-out demand due to the spread of the new coronavirus infection. It is expected that the demand for take-out services will continue to increase and there will be a shortage of gig workers.

'If you pay more gig workers than ever before, you'll get more gig workers,' Parrot said. Improving the treatment of gig workers is a shortcut to getting gig workers.