Coronavirus: What will the future of ridesharing look like? Uber and Lyft drivers see tough road ahead

ByKristen Sze and Juan Carlos Guerrero KGO logo

Wednesday, May 20, 2020

What will the future of ridesharing look like?

The novel coronavirus has affected three of the most profitable sectors that made ride hailing profitable for drivers in the San Francisco Bay Area.

SAN FRANCISCO (KGO) -- If you want to know how ridesharing is doing during the pandemic, just look at the traffic on Bush Street on a weekday morning.

Usually, the main thoroughfare is bumper to bumper with cars heading to downtown San Francisco. On Monday morning, at what should be the peak of the weekday commute, entire blocks of the street would stay empty waiting for a car to pass by.

It's a reality Kyilin Wu knows all too well.

"I started out at 8 a.m. and only got two passengers. Business is really slow right now," said Wu, who picked up just two passengers in two hours of driving around the city.

It didn't used to be that way. In 2017, the San Francisco County Transportation Authority released a report that said ride hailng cars like Uber and Lyft made more than 170,000 trips within the city every weekday. A fifth of all trips that started and ended in San Francisco were made by ride hailing vehicles.

Business was so good that drivers like Carlos Ramos would come from Bakersfield to drive in San Francisco. He would work one or two weeks at a time before heading back home. Ramos is staying home now.

"The rideshare industry just kind of dried up, especially in San Francisco and the Bay Area. Nobody wants to be out there right now," said Ramos.

Edan Alba saw his earning drop so much that he stopped driving.

"At the point where I stopped working, the earnings were at a level of $5 an hour," said Alba, who is getting unemployment after the federal government extended benefits to gig workers as part of the CARES Act.

Alba does not see the rideshare industry recovering anytime soon.

"I can see a situation where there are a lot less riders in the future," said Alba from his Alameda home.

The pandemic has dried up three of the most profitable sectors for drivers -- the first being morning and evening commuters.

"That's one leg of the rideshare economy that is looking like it is not going to be there anymore," said Ramos. He points at Twitter as a reason. The social media company, which is headquartered in San Francisco, told employees that they can work from home until the end of the year. Ramos expects other companies to do the same if they see work from home does not affect employee production.

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Another factor is the economic downturn. Uber has laid off 3,700 employees, nearly 25% of its workforce, and closed a San Francisco office. Lyft has laid off 1,000 employees. Other tech companies are also hurting. Airbnb laid off 1,900 workers. There will simply be fewer people working in then city. Alba also worked for Zum, a transportation service for children. With schools closed, that source of income has also vanished.

The other lucrative sector for drivers has been tourism, but that is virtually non-existent right now. Ramos anticipates it will take a long time before tourists feel safe enough again to travel.

To make matters worse, special events and conventions like Dreamforce, as well as festivals like Outside Lands, are being cancelled.

"They are probably the last thing that comes back, the music festivals, the Moscone conventions. Those are probably gone for at least two years," Ramos speculates. He is an organizer for Gig Workers Rising. The group has been pressuring companies like Uber and Lyft to improve wages and benefits for drivers.

They celebrated a victory in January when AB5, a new California gig worker law, took effect that required companies to reclassify many contract workers as employees. But Uber and Lyft have not complied. The California attorney general has sued the ride-hailing companies for ignoring the law. Uber and Lyft have instead contributed $60 million dollars to a proposed November ballot initiative that would exempt them from the gig worker law.

That riles up drivers like Alba. "Lyft and Uber do not report out earnings to the Employment Development Department like they should. Both of these companies are literally robbing hundreds of thousands of workers by taking from them the benefits they get by law."

A study by the UC Berkeley Labor Center said that Uber and Lyft should owe the state $413 million in unpaid unemployment insurance taxes. The companies dispute the study and say it was done by a group advocating for labor.

Not all drivers have been getting aid during the pandemic. Undocumented immigrants were not eligible for the federal stimulus checks, nor can they get unemployment benefits.

Ramos said these are the drivers who have been forced to keep driving during the health crisis to pay their bills.

"The majority of drivers right now, they are not driving. I talked to a lot of the drivers who are still driving and those drivers are primarily immigrants. They don't qualify for any type of assistance."

Wu has applied for Pandemic Unemployment Assistance but has not gotten a reply. He is forced to keep driving.

"I got a bunch of bills I need to take care of - the car, food, rent," said Wu, who spent the rest of the morning waiting for passengers at San Francisco International Airport. It looked like it was going to be a long wait.

For more information about unemployment benefits for self-employed and contract workers, visit the California Employment Development Department's website.

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