In the past few years the ridesharing industry has enjoyed a massive growth of popularity due to several positive factors including reduced travel costs, traffic congestion, and lower emissions for the environment. Since the pandemic, the entire ride-hailing industry has come to grips with a major decrease in ridership and fears of the spread of the virus in confined spaces.
The Height of the Ridesharing Industry
The Boston Globe reported in 2019 that ridesharing companies completed 81.3 million rides in Massachusetts during the previous year. These numbers may not be a shock to anyone who regularly used Uber, Lyft, or ZipCars, but even that number was up a whopping 25 percent according to a report released by the Department of Public Utilities.
Rideshares were once strictly an urban phenomenon that relied heavily on morning and evening commuters, tourism, special events, sporting events, concerts, and conventions. In recent years the rideshare circles have expanded to suburbs to include commuters who wanted an alternative to mass transit.
The Industry Takes a Hit
Unfortunately, since March of this year, when Massachusetts Governor Charlie Baker instituted stay-at-home orders for businesses and employees all over the state, the rideshare industry has taken a huge hit.
It doesn’t take an expert to see that the industry as a whole will be sidelined for the foreseeable future. All one needs to do is take a ride during what used to be peak commute hours to realize the drastic drop in vehicles on the road. According to the Mass Department of Transportation, traffic on Massachusetts roadways dropped by 50% on average during the first two months of the pandemic.
In response to these declining numbers, Uber reported in May that it had cut its workforce by 14% and Lyft by 17%. According to MyWallStreet online, “Both companies are suffering big time, with their revenue slowing by over 50%. Their stock prices have also taken a big hit, With Uber plummeting by around 64% between February and March this year and Lyft falling by 70% in the same time.”
What The Future Holds
It should come as no surprise that surveys completed by the IBM’s Institute for Business, show that 20% of people who regularly used public transit such as buses, subways, or trains before the pandemic, that they no longer will do so, and another 28 percent said they will use it less frequently. When it comes to ride sharing, a majority of the respondents said they would use the services less often or stop using them completely.
This study does not mean that ridesharing will disappear altogether but may morph its clientele toward the delivery service industry. Uber has already started adapting as it launched a new Work Hub to help its drivers find other types of work such as logistics and customer service.