How COVID-19 is impacting rideshare drivers and businesses

The Coronavirus has disrupted every aspect of individual lives, societies and businesses around the world. Just as ridesharing was realizing its full potential, COVID-19 disrupted that industry, too. Now, individual drivers and ridesharing businesses are facing the impacts of the pandemic.

The outbreak continues to spread and, specifically in the United States, the path back to normalcy is unclear. The ridesharing industry will keep growing, but the Coronavirus is temporarily hindering that growth. From supplies, employee benefits and a fluctuating need for ridesharing, here is what you need to know.

Employee impacts

Uber and Lyft are two of the biggest ridesharing platforms in the world. As their reach expands, they gain more and more employees. However, the pandemic unveiled how these companies can consider drivers independent contractors instead of employees. The difference between the two terms ultimately boils down to one thing: benefits.

This issue is gaining more recognition as COVID-19 exposes the need for workplace benefits. In fact, California has sued Uber and Lyft, claiming that the companies are wrongfully classifying drivers as independent contractors. This classification allows bigger companies to omit benefits — which employees need during this pandemic.

Though the government considers drivers to be “essential” workers, they are not receiving proper compensation. Without benefits like paid sick leave, drivers will need to continue to operate, which means they must continue to put themselves at risk while transporting individuals. Here, the other employee impact comes into play: supplies.

Companies must provide the best employment practices and benefits for their employees during COVID-19. Part of these practices includes equipping employees with the proper tools. For drivers, the tools will be masks, gloves and sanitation products.

Uber and Lyft have both released COVID-19 policies where they detail how they are helping their contractors. Both plans include shipping masks and sanitation products to drivers, but whether it will be enough is still up in the air.

Business impacts

The pandemic is also affecting the business side of things. As more and more states enforce stay-at-home orders and social distancing, fewer people use ridesharing apps. Uber and Lyft have taken this, alongside the danger of the virus, into consideration. Part of protecting drivers and customers involves more drastic measures.

First, both companies have halted the carpooling ability — an option that lets people share rides with strangers or friends in order to cut down on costs. Since that would be too risky in case the virus spread, Uber and Lyft are now only offering individual rides. However, Lyft is trying to ease the transition with its “Wait & Save” option. This feature asks that you wait a few minutes longer for your ride, but you will save money because of it.

In addition to the lack of carpooling options, more people are choosing to stay at home and social distance instead of breaking their state’s orders. Though some people will still use Uber and Lyft to get to and from essential services, like grocery stores, communities aren’t ridesharing as much anymore. Due to the focus on these essential services, more people are turning to delivery rather than ridesharing. Drivers from Uber and Lyft may start to switch to GrubHub, Doordash, Instacart and more as the Coronavirus progresses.

Though both Uber’s and Lyft’s markets saw a detrimental dip in March, they are slowly recovering. However long COVID-19 lasts, drivers, customers and industries will begin to adapt. Social distancing can’t last forever, but people can adjust in the meantime with the safest practices and protection.

The future of ridesharing

Despite the impacts of COVID-19, Uber and Lyft will most likely bounce back relatively soon. The focus then needs to be on the employees from these ridesharing companies. Drivers are counting on their employers and state governments to take action to protect them in situations like the Coronavirus. With better protection, unprecedented events will be easier to financially manage and survive.