Amid Driver Shortages, Ride Share Companies Hike Prices By 40%

Ride-sharing companies like Uber and Lyft are hiking prices.

The phenomenon occurs as businesses struggle to attract workers, limiting owners’ capacity to serve consumers ready to participate in the economy after widespread government-mandated lockdowns.

The New York Times reports:

Customers around the country say they have been startled by the price jumps. In some cases, they say, their Uber rides from airports cost as much as their plane tickets.

Uber and its top rival, Lyft, acknowledge that prices are up and wait times are longer, but they won’t provide specifics. A recent analysis by the research firm Rakuten Intelligence found that the cost of a ride was 37 percent higher in March than it was a year ago. In April, the cost was up 40 percent.

Business Insider adds:

This increase becomes even more drastic during “surge pricing” periods, when Uber hikes up pay to attract more drivers, Insider’s Grace Dean reported in June. In New York City, an Uber driver can make around $37.44 an hour, while in Houston the median hourly wage is $22.97.  

Uber CEO Dara Khosrowshahi expects that prices will return “to nearly the good old days” by September.

Also in September, the $300-per-week enhanced federal unemployment insurance funded by the American Rescue Plan is set to expire. Many economists point to the payments as a factor slowing the labor market recovery in the United States as employees delay returning to their positions in favor of reaping the unemployment benefits.

A Morning Consult survey, for example, found that one in eight American adults who were jobless at the end of June reported that they had refused positions because they “receive enough money from unemployment insurance without having to work.” Since 14.1 million adults were collecting benefits at the time of the survey, Morning Consult concluded that up to 1.8 million Americans had turned down jobs due to the handouts.

At the beginning of the summer, two dozen Republican governors announced that they would remove their states from the American Rescue Plan payments in the interest of aiding small businesses struggling to attract workers. However, residents of states such as Indiana, Maryland, Texas, and Florida began filing lawsuits to restore the benefits programs.

A lawsuit against Gov. Ron DeSantis (R-FL) reads:

DeSantis’ termination of Florida’s participation in these programs will reduce and/or eliminate the benefits to which the Plaintiffs would otherwise be entitled.

Given that Florida’s unemployment compensation program pays one of the lowest benefits in the Country, and is one of the shortest durations in the country, even the addition of the extra Federal payments still barely allows unemployed Floridians to pay their basic living expenses.

By terminating Florida’s participation… Defendants are violating their clear legal and statutory duty to secure such benefits for employees in the State of Florida including the Plaintiffs and all other residents of the State of Florida who have been receiving FPUC benefits.

Most states with Democratic governors are still participating in the enhanced unemployment handouts.

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