Why Are Uber And Lyft So Expensive Right Now?

Shutterstock.com
Shutterstock.com

In mid-June, I embarked on my first air travel since before the pandemic. I planned to just take an Uber to the airport, figuring it was worth it to spare my husband the stress of taking time off work to drive me. Then I saw the estimated cost for the ride: $89 — to drive 10 miles. I’m used to rolling my eyes at inflated fares during rush hour and late nights, but this was more than double the pre-tip amount I’d paid before the pandemic.

Find Out More: The Effect of Consumer Spending on Inflation
Check Out: Pandemic Shortages: Buy This, Not That

Lyft touted the same cringe-worthy price.

Was it just an LAX thing? A freak event?

I made my husband drive me to the airport and then when I landed at my destination, I hailed an Uber to the hotel — for $50. Seemed reasonable, given that I was in approximately the middle of nowhere, Montana, and had no idea where I was going. But a record 30 minutes later, the driver pulled up on time and I plopped in, braced for a long ride.

Just Wing It: National Chicken Wing Shortage Causes Prices To Rise
See: When Will the Chip Shortage End? Experts Weigh In

Exactly 12 minutes later we were at the hotel. Twelve minutes = $50. That’s more than $4 a minute. Was this just some new airport thing? Had some legislation passed that I didn’t know about? Was I dead and just didn’t know it? I had so many questions.

And now, two months and what feels like two billion dollars in Uber and Lyft fare later, I still don’t know what the heck is going on. Friends in other cities tell me it’s just as bad there as it is in Los Angeles. Recent research from Rakuten Intelligence found that the cost of a ride was 40% higher in April than it was a year prior.

Read More: Costco Customers Cannot Get This Staple Item
Good News: As Americans Prepare for Higher Inflation, Food and Gas Prices May Soon Fall

Why have Uber and Lyft become so expensive?

It has everything to do with the pandemic.

“The pandemic demonstrated the volatility of the ride-hailing industry with early sharp reductions in passenger demand and subsequent reductions in driver supply,” said Stan Caldwell, executive director of Carnegie Mellon’s Traffic21 Institute.

Peter C. Earle, an economist at the American Institute for Economic Research, explained that owing to a shortage of drivers, surges (and the higher prices associated with them) have become more common.

Goodbye, Seafood? Inflation and Shortages Have Restaurants Taking Items Off the Menu

Why haven’t all previous Uber and Lyft drivers gotten back behind the wheel as the world has opened back up? One reason could be that they’re actually making more money being unemployed than they are being a gig worker.