If you've felt like rideshare trips have gotten increasingly expensive this year, you're not alone—and you're not wrong.
The average Uber and Lyft fare rose consistently through the spring and early summer across the country, with consumers paying nearly 50% more per ride in July than they did before the COVID-19 pandemic, according to The Wall Street Journal.
Much of the pressure on the rideshare market is due to the same set of conditions that drove up the cost of airline tickets and rental vehicles for travelers this summer: a sharp decrease in demand last year followed by a sharp rise in demand this spring.
When the pandemic first shut down the country last year, demand for ridesharing collapsed. In a similar vein, as work opportunities dried up, rideshare drivers who did not want to risk contracting the virus turned to other opportunities or claimed unemployment benefits.
But the economic conditions changed rapidly this spring and summer as Austinites received COVID-19 vaccinations and the country's economy reopened. As more people in Austin and around the country began to look for rides, there were fewer drivers to provide them.
One Austin rideshare driver says there are other factors at play.
Mo, a 52-year-old immigrant from India who came to the U.S. more than two decades ago, drove 80 hours per week for Uber and Lyft for years—refusing to take even holidays off. But lately, he has cut back.
"Driving for Uber and Lyft is a nightmare," Mo said. "It comes with a lot of risks, and really the pay is just enough to keep up with even the operational expenses, let alone breaking even or even taking something home."
Mo, who asked his name not be used for privacy reasons, said drivers' earning power with Uber and Lyft has not increased at all, let alone commensurately.
That, along with quality control and safety concerns, convinced Mo to help organize a strike of Austin rideshare drivers in late June. Austin was one of a number of cities around the country to see strikes that day, with the largest action taking place in California, where Proposition 22, classifying drivers as independent contractors rather than employees, passed last year.
"They will have to increase the mileage rates," Mo said. "It is impossible to survive… You cannot give such bad mileage rates to drivers. That's the minimum thing they will have to do."
But a Lyft spokesperson wrote in a message to Austonia that certain drivers are earning more money driving than they were prior to the onset of the pandemic and that drivers are steadily returning to work.
"As vaccines rolled out and people started moving again, we began to see the demand for rides outpace the number of available drivers," Lyft spokesperson Eric Smith said. "We've added thousands of drivers in the past few weeks and it's already leading to a better rider experience with wait times down more than 15% nationwide, and down 35% in some major markets."
Uber did not respond to a request for comment.
Mo said that the demand in Austin for rides fluctuates greatly throughout the week, spiking on weekend evenings and slowing during weekdays. Demand is routinely highest during marquee events like Austin City Limits and South By Southwest.
"It continues to be a great time to drive," Smith wrote.
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Giga Texas, the massive Tesla factory in southeast Travis County is getting even bigger.
The company filed with the city of Austin this week to expand its headquarters with a new 500,000-square-foot building. The permit application notes “GA 2 and 3 expansion,” which indicates the company will make two general assembly lines in the building.
More details about the plans for the building are unclear. The gigafactory has been focused on Model Y production since it opened in April, but the company is also aiming for Cybertruck production to kick off in mid-2023.
While there is room for expansion on the 3.3 square miles of land Tesla has, this move comes after CEO Elon Musk’s recent comments about the state of the economy and its impact on Tesla.
In a May interview with Tesla Owners Silicon Valley, Musk said the gigafactories in Berlin and Austin are “gigantic money furnaces” and said Giga Texas had manufactured only a small number of cars.
And in June, Musk sent a company wide email saying Tesla will be reducing salaried headcount by 10%, then later tweeted salaried headcount should be fairly flat.
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