Uber putting $250M toward boosting driver incentives, enticing new recruits

Uber, Lyft suspend shared ride services in response to COVID-19

The companies announced the suspension of the services on Tuesday.

Uber announced Wednesday that it will dedicate $250 million in stimulus funds to the ride-hailing company’s most valuable employees: drivers.

Amid a year of crippling losses, the ride-hailing company said that drivers who already had high earnings will benefit from the new multi-million dollar boost. Uber said it also hopes to entice new driver recruits with the money.

At the onset of the COVID-19 pandemic, fewer people were leaving their homes, diminishing the demand for Uber rides to work and social events. But as more people in the U.S. are vaccinated and states start to ease preventative health restrictions, traffic is slowly returning to normal.

"We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels," according to an Uber news release.

Uber highlighted that, even without the $250 million stimulus, some drivers are earning top dollar, on average, in the following cities:

Philadelphia: $31.03

Chicago: $28.73

Austin: $26.66

Miami: $26.05

Phoenix: $25.94

Uber hopes the stimulus will encourage optimism both for their current employees and provide incentives for new employees to join the company.

Rider gets into the backseat of an Uber.

The popular rideshare and food delivery company lost $1.78 billion in its second quarter of 2020 as the pandemic carved a gaping hole into its ride-hailing business, with millions of people staying home to reduce the spread of the coronavirus.

It’s pinning its hopes in part on its booming food-delivery business, but that bustling corner of the company didn’t turn a profit.

The San Francisco-based ride-hailing giant brought in $2.24 billion in revenue during the second quarter, down 27% from the same time in 2019, on a constant currency basis, the company said.

Uber’s mobility business, which includes ride-hailing and micro-mobility options such as scooters and bikes, saw its revenue shrink to $790 million, down 67% from $2.38 billion in 2019.

Uber’s quarterly losses included $382 million in restructuring and related charges as the company laid off 6,700 people — a quarter of its workforce — in May. Uber said at the time that it would be closing or consolidating 45 offices worldwide.

Uber revenue fell in the U.S. and across the world except in the Asia-Pacific region.

The Associated Press contributed to this report.