Ride-hail industry severely hit by coronavirus crisis; recovery might take years
As the number of coronavirus cases worldwide continue to surge, the restrictions imposed due to the virus has taken a severe hit on the ride-hail industry.
The Washington Post quoted Uber chief executive Dara Khosrowshahi as saying that the ride-hail industry is experiencing "a tale of 10,000 cities."
The analysts have opined that the ride-hail industry may take months or even years to start to recover. However, the companies are already witnessing ridership difference according to the cities which are reopening, recovering, or re-imposing restrictions.
While Hong Kong and New Zealand have reportedly exceeded their pre-pandemic ridership, the ridership in the US is still suffering. The Washington Post reported that the gross bookings on Uber rides were down 75 per cent in the three months through June.
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Though Uber did not reveal the city-by-city breakdowns during its latest financial earnings, it has been reported that the ridership in West Coast cities like San Francisco and Los Angeles has suffered the most amid the Covid-19 pandemic. However, New York, which was the epicentre of the virus outbreak in the US, has seen a recovery in the ridership.
"When travel restrictions lift, we know that mobility trips rebound," Khosrowshahi said.
With the gradual lifting of the Covid-19 restrictions, there has been a steady improvement in the ridership. Citing Uber's May update, The Washington Post reported that cities like Georgia and Texas saw 43 percent and 50 percent week-on-week growth, respectively, as they eased their restrictions.
Besides, only a handful of drivers provided service amid the Covid-19 pandemic leading to long wait times and higher fares. The drivers, who had reportedly preferred to stay at home in fear of getting exposed to coronavirus infection, remain unsure of whether to be back on streets after the crisis ends.
"The question is how long until we get a vaccination?" Ben Black, a consumer Internet research analyst at the firm Evercore ISI, was quoted as saying. "Before you have a vaccination, things aren't going to be back to normal."
To prevent the spread of coronavirus infections the ride-hail services have listed their own protocols that need to be followed by both drivers and passengers.
The Washington Post reported that in May the ride-hail companies had announced several policies requiring drivers and passengers to wear masks, ensure cleanliness and reduce crowding on their rides. The drivers were required to clean their cars regularly, have the front passenger seats off-limits to encourage social distancing, and pool rides were to be suspended amid the pandemic.
While the Uber executives are hoping that the recovery will happen with the loosening of Covid-19 restrictions, Khosrowshahi has said the company has not identified any larger patterns from the pandemic that would permanently change the business.
The Washington Post reported that Uber is banking on its food delivery business for now.