- Uber and Lyft are recovering from the COVID-19 pandemic as they push to regrow their fleet of US drivers.
- Incentives and benefits programs, along with increased COVID safety measures, are fueling drivers' return to the app.
- The companies are citing higher hourly wages for their drivers, though they have oversold earnings to their drivers in the past.
- See more stories on Insider's business page.
Uber and Lyft workers are making significant post-COVID pay gains and the number of drivers on the roads is rebounding, the companies said this week.
As COVID-19 vaccination rates increased in the spring and summer, rideshare drivers have gradually returned to the roads. In their respective second quarter earnings calls, Uber and Lyft said they are seeing a growth in driver numbers, crediting their incentives programs.
Uber says mobility drivers, who primarily carry passengers, are making over $40 an active hour in its top 20 US cities.
"The vast majority of the spending as it relates to driver acquisition is really incentives," Uber CEO Dara Khosrowshahi said in the call. "It's about putting dollars in front of drivers."
Demand for ride-sharing services recovered this spring after plummeting in 2020, but the number of available workers, like in many sectors, has been slow to bounce back.
Uber will soon scale back its COVID-era incentives like temporarily boosted pay for drivers, which Uber invested $250 million into earlier this year.
Uber saw 420,000 monthly active drivers from February to July. The company says the majority of its new driver growth comes from "resurrected drivers," or drivers who have driven with Uber in the past, but left due to COVID safety concerns.
Though the company continues to conduct background checks for mobility drivers, it has reduced the onboarding time by 90% for food courier drivers in its Uber Eats program. After it gets drivers set up making food deliveries, Uber can go through the process of background checks to transition them to mobility, expediting the time it takes to get a new driver on the road.
Wait times have also return to normal pre-pandemic levels, the company said.
Lyft also cited similar driver growth.
While online, drivers in Lyft's busiest markets are making more than $35 an hour on average, Lyft President John Zimmer said. Its drivers are earning more than ever before, Lyft CEO Logan Green added.
The company welcomed 50% more new drivers, which set a post-COVID quarterly high. Like Uber, Lyft says this is due to its incentives program and sign on bonuses.
"From day one we have been driver centric," Lyft CFO Brian Roberts said in the call. "We've always known that is critically important to invest in our driver community and create compelling opportunities for them to use Lyft."
Unlike its counterpart, Lyft says it will continue to provide and experiment with driver incentives. It is working to build out a rewards program that includes benefits that help drivers reduce their maintenance costs and receive priority access to ride requests.
Lyft also plans to capitalize on the continuance of enhanced federal unemployment benefits, since most of its drivers use Lyft to supplement their income.
Despite weighty promises to drivers from both companies, Uber and Lyft have been unable to back up their claims in the past.
The companies don't disclose their pay data with their drivers nor the public, and have overestimated driver's earnings in the past, with some drivers saying they've made $5 to $20 an hour.
According to their earnings calls, the companies will continue their push to attract and retain new drivers following their pandemic lows, hoping to shrink their losses as people get more comfortable driving and riding in rideshares again.
Axel Springer, Insider Inc.'s parent company, is an investor in Uber.