- Some Uber and Lyft drivers say it's become harder to make money over the past year.
- They say the growing number of drivers is increasing competition and declining pay.
Many Uber and Lyft drivers say ride-hailing has become less profitable than it used to be, and some are blaming that on the gig's popularity.
Fred, a part-time Uber driver in Virginia, earned roughly $44,000 in 2022, according to documents viewed by Business Insider, but he said his earnings fell over 25% last year.
"I would occasionally go to the airport for a ride and stop in at the Uber and Lyft waiting areas during the pandemic," said Fred, who asked to use a pseudonym for fear of professional repercussions. "Those nights, I would see the same eight to 10 people waiting for rides. Now the lot is full each time I go past with 20 to 40 cars waiting."
Fred is one of several drivers who told Business Insider that an increase in drivers has contributed to fewer available — and lower-paying — trips.
In November 2023, Uber announced it had a record 6.5 million active drivers and couriers. This came after the number of global Uber drivers increased 31% in 2022 to a record five million. Meanwhile, in the fall of 2022, Lyft said it had its highest number of active drivers in over two years but didn't respond to Business Insider's request for data on the growth of drivers in recent years.
While elevated inflation has motivated more people to try gigs like ride-hailing, easing COVID-19 concerns have also fueled the recent growth in drivers.
Between January and April 2020, the number of active Uber and Lyft drivers was more than cut in half, according to the data analytics company Gridwise. As pandemic-related health concerns persisted, a driver shortage lasted well into 2021.
Drivers who worked during the height of the pandemic were often rewarded. Lower driver supply and recovering rider demand contributed to higher fares and wages, and for many drivers, customer tips were more generous as well.
But times have changed. Driver supply has rebounded, and tipping seems to have returned to normal or become less common for some drivers.
Other factors could be working against drivers as well. Some have complained that changes to platform algorithms, not increasing competition, are what's truly constraining drivers' pay. One San Francisco-based Lyft driver told BI that Waymo's self-driving taxis in the city have added another layer of competition.
The changing landscape can have a big impact on hourly earnings
Rich, an Arizona Uber driver in his 70s, made over $80,000 in 2022. But he said it's become more difficult to make money on the platform lately.
"I am making less, per hour, this year than I made in the previous three years," said Rich, who asked to use a pseudonym for fear of professional repercussions.
Rich said driving was very profitable in early 2021, which he attributed to the decrease in drivers caused by COVID concerns. He said the recent uptick in drivers has changed the landscape.
"There were a number of times when I'd make over $2,000 a week — as high as $2,700 one week — however, those days are long gone," he said, referring to his earnings in 2022. "I can't remember the last time I made $2,000 in a week."
In September and October, Rich earned between $1,000 and $1,500 during the four weeks he drove five or more days, according to a document viewed by Business Insider.
However, Uber disagrees with this sentiment from drivers. When asked whether the rising number of drivers has negatively impacted earnings on the Uber platform, a company spokesperson told BI that growing customer demand has helped to offset the increase in driver supply.
"Drivers remain busy and earnings are strong," they said. "That's largely because we have more customers on the platform today than ever before — taking more trips and placing more orders than ever before."
In November, Uber reported that its monthly active platform consumers had grown 15% over the prior year to 142 million. The number of trips increased 25% year-over-year, and the number of monthly trips per consumer matched an all-time high of 5.7.
The median US driver's earnings per utilized hour, including tips and incentives, has grown nearly 30% over the last six years, the spokesperson said.
A Lyft spokesperson told BI via email that the typical US driver is earning over $30 per utilized hour, including tips and bonuses.
Driving during less busy periods can boost earnings
For drivers concerned about rising competition, there's one possible solution: start your shift early in the morning.
On a normal weekday, Fred said he starts work at 3:30 a.m. He drives until 6 a.m., works from 6:30 a.m. to 4 p.m. at his office job, then starts driving again right after work until about 7:30 p.m. or 8 p.m.
Rich said it's not uncommon for him to start working as early as 4:30 a.m.
"After I have my coffee and watch a little news, I start driving," he said.
Are you a gig worker willing to share what you think is the best gig for making money? If so, reach out to this reporter at jzinkula@insider.com.