October's issue includes our annual 20 Questions feature. You can find this and 19 other questions–and answers–there.
Hopping into a car with a stranger always felt a little weird. Now it could result in a trip to a hospital. While the pandemic continues to ravage the ride-hailing industry (along with the country's economy), the big question is, can these companies ride out the storm?
Uber and Lyft were both notoriously unprofitable ahead of COVID-19. Drops in ridership during the pandemic have compounded that. In April, ridership fell as much as 80 percent in some U.S. cities. Even with Uber's food delivery service ramping up as people order in, the company is burning through cash.
Both Lyft and Uber currently require the driver and rider to wear masks, which has likely turned off some users. And Lyft is rolling out partitions between the driver and riders to further abate the risk of coronavirus transmission. But even if the fear of infection lessens once an effective vaccine restores some semblance of normalcy, it will take some time before people feel comfortable traveling with strangers again. In a CarGurus survey of U.S. shoppers, 11 percent of people said they would stop using ride-sharing services post-pandemic, and 28 percent expect to use it less.
Yet both companies—infused with billions in investor cash—have played the long game to profitability. And since both Uber and Lyft treat their drivers as independent contractors, neither is on the hook for healthcare costs or hourly wages for drivers who are sitting idle. Those light balance sheets will make it easier for the companies to survive.
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