Why Uber and Lyft Are So Expensive Now
I keep seeing articles explaining why Uber is so expensive and Lyft is so expensive when they used to be much cheaper. The answer is that as publicly traded companies, Uber and Lyft are no longer allowed to play the kind of funny-money games they did when first starting up where they covered part of the payment to drivers to make their service seem cheaper. Reality Catches Up to Uber and Lyft When Lyft and Uber were private companies swimming in piles of venture capital money, they paid drivers more than they could earn in order to attract enough drivers to their start up service. Once they were established, and knocked off the incumbent monopoly of taxi drivers, both Uber and Lyft tried to be real businesses by cutting the amount they were paying drivers in order to try and make rides profitable to the company. They never succeeded. Initially, Lyft drivers and Uber drivers didn’t have many alternatives, but the pandemic boosted the food delivery business enough that drivers found a way to make more money by delivering food. This cut the number of drivers willing to driver for Uber and Lyft as well as the number of hours …