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Uber prices soar as ride-hailing app struggles to hire new drivers

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A man checks his smartphone whilst standing against an illuminated screen bearing the Uber logo
A man checks his smartphone whilst standing against an illuminated screen bearing the Uber logo

The price of Uber rides has spiked as the taxi-hailing app struggles to match soaring demand with a supply of drivers.

Data from market research company Edison found that the average cost of a journey had risen by a third since April, from £9 to around £12. Rival operator Bolt has also had higher fares.

Uber said the number of drivers on its app had recovered to pre-pandemic levels, but that it was experiencing unprecedented demand as cities reopen.

Public transport usage remains 17pc below pre-pandemic usage, according to Google data, while in London, Uber’s biggest market, it is 30pc below.

Under the app’s “dynamic pricing”, the price of rides is adjusted based on demand from passengers and the supply of drivers, a model it says encourages more drivers at peak times and manages supply.

Uber has said it plans to increase the number of drivers on the app from 70,000 to around 90,000 by the end of the year.

Uber app and a black cab - AFP
Uber app and a black cab - AFP

Spending on Uber rides in the UK dropped to a tenth of previous levels during the initial coronavirus shutdowns last year and fell again during the winter lockdowns.

However, since June spending has steadily been above pre-pandemic levels at both Uber and Bolt, and peaked in late June.

Uber said spending on rides in the UK made up 7.1pc of its total in the second quarter of the year, or around $613m (£447m), compared to $332.8m in the first quarter.

Rising prices amid mismatched supply and demand has seen some cases in which users are charged significantly more than the fixed cost of a black cab, despite Uber historically being cheaper.

In the US, the company has put $250m into bonuses to encourage drivers back on to the road.

Earlier this year, it agreed to start guaranteeing drivers a minimum wage as well as paying holiday pay and pensions, after losing a long running legal battle over drivers’ employment status.