In a year overturned by the pandemic, Roberto Moreno’s experience as a ride-hailing driver in San Diego reflected the fortunes of the companies he drove.
In March, worried about being sick more than losing money, he stopped welcoming guests. In June, when the pandemic receded in California, he was back on the road. But when the number of coronavirus cases started to rise again, he closed it again.
This week, Lyft and Uber, the biggest ride-hailing companies, will release their financial results for last year, and they are expected to look like the roller coaster Mr. Moreno went through.
Investors are also expected to focus heavily on signs of improvement this year, and whether Uber and Lyft – held two of the highest public initials of any kind. recent years – will be an indicator of the rest of the tourism industry. And they’re looking for Airbnb, which is expected to report its earnings in the coming weeks, for a hint on a consumer spending pattern.
“The ride share is in the eye of the storm,” said Daniel Ives, chief executive of equity research at Wedbush Securities. “Even though it’s better than expected, you’re still 50 to 60 percent off travel with continuous locks across cities and states.”
The picture of the companies’ second decline late last year is starting to become clearer. There’s some good news: It wasn’t supposed to be as bad as the first. Everyone kept walking even though the door was locked. In Uber’s case, its aggressive pursuit of the food delivery business paid off.
But the second recession is another setback to hope that companies, which have never been profitable and have lost billions of dollars annually, can be profitable this year. And drivers who stay on the road report a drop in income even paying more for safety equipment such as masks and disinfectants.
Companies declined to comment on the business impact of the pandemic, citing the period of depression before earnings. Investors and analysts believe the companies are ready to recover after the vaccine is widely available and their shares remain high on Friday. Uber ended the day at $ 58, and Lyft ended at $ 53 – up 175 percent and 150 percent from their low last year.
Uber’s core business, fell 80% in April and around 53% in Q3 2020, the most recent time it released data.
To avoid losses, Uber doubled down on its food delivery service, Uber Eats, and acquired a competing service, Postmate. In the third quarter of last year, Uber said its revenue from its food delivery business increased 125%. Last week, Uber also acquired Drizly, a wine delivery service, for $ 1.1 billion.
Uber also cut costs by eliminating unprofitable businesses like its self-driving car unit, aiming to develop fully self-driving vehicles that burn at least $ 400 million a year. Analysts now expect Uber’s fourth-quarter revenue to drop about 12% year over year.
Lyft, which has avoided expanding into food delivery, has no major delivery business to return, though it said it will be testing a small program, shipping some products. “essential” products such as medical supplies and groceries. Lyft recently said trips were down 75% in April from the previous year and around 50% in November.
Analysts expect Lyft’s fourth quarter revenue to drop about 44% year over year. The company said in a legal filing in December that it would lose between $ 190 million and $ 200 million less money than it originally predicted, predicting a loss of more than $ 185 million.
Airbnb, another tech pet that went public in December, also experienced a second drop. In the last week of December, usually time for holiday travel, bookings on Airbnb fell 18% nationally, according to Transparent, a holiday rental intelligence firm that tracks bookings. on Airbnb and other services. An Airbnb spokesman declined to comment.
Many drivers who left the ride-hailing app in March have yet to return, worried about the risks of spending their days in the car with strangers. For those who have returned, the job has been difficult.
Gridwise, an income tracking service for contract employees, said driver earnings fell about 10% in November, a double drop reminiscent of the 24% drop in the income drivers saw. In March, before recovering on Christmas. And drivers are spending more time sitting in their cars, waiting for the next ride, while drivers cut tipping, Gridwise said.
But a Lyft spokesperson said that in some of the company’s top 10 markets, driver incomes have increased. Eric Smith, Lyft spokesman, said: Since there were fewer drivers on the road during a pandemic, “those who are still driving are getting a larger share of the available rides and therefore they earn more. Get more money while they’re driving.
Some drivers reported that they are making more choices about the trips they accept, targeting high value trips and reducing short trips. Sometimes, that means looking for riders who have left illegal rallies.
Ben Valdez, an Uber driver in Los Angeles, said: “I’m looking for what I would consider a super pervasive event. “A home party in Hollywood Hills or remote areas of LA – we’re actively looking for these because we can count on the people who pay the most to get out of there.”
Mr. Valdez has built a plastic partition in his car to separate the front and rear seats. Despite the risks, Mr. Valdez says the driving is worth it if he can secure valuable rides. “I have the choice of living on a credit card or going out there and risking myself for money,” he said.
Although Uber and Lyft provide a number of cleaning products and masks for drivers, Mr. Valdez, who spends between $ 40 and $ 60 a week on masks and disinfectants, and other drivers already told The New York Times they were not getting enough supplies and had to supplement what they got from Uber and Lyft with their own purchases.
Uber says it has distributed more than 21 million masks and disinfectants for more than a million drivers and transporters in the United States and Canada, and prohibits 3,726 drivers for “repeated violations” of a policy that requires passengers to wear a mask. Lyft said it provided drivers with more than half a million masks, cleaning supplies and in-car partitions.
Many contract workers have turned to delivery services such as DoorDash and Instacart, seeing them as safer options than carrying passengers in their vehicles. Moreno, who runs a WhatsApp group for Spanish-speaking drivers in the San Diego area, said many of the drivers in his group have turned to food delivery as a safer option.
“You have more safety nets from a delivery point of view. Do you choose to be safer with less income, or do you take more risks and make more money for it? ”Said Ryan Green, CEO of Gridwise. “It’s a tough choice drivers have to make.”