Uber announces $250M driver stimulus package amid post-COVID driver shortage

'The $250 million driver stimulus will go directly to drivers,' an Uber spokesperson says

Uber on Wednesday announced a $250 million driver stimulus package aimed at incentivizing new workers as the company faces a post-pandemic driver shortage.

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Dennis Cinelli, Uber's vice president of U.S. & Canada Mobility said in a Thursday blog post that the rideshare app lost "many drivers" amid COVID-19 in 2020, and now there are more riders requesting trips than there are drivers available to make them.

"The $250 million driver stimulus will go directly to drivers who start driving again as well as new drivers who join Uber," company spokesperson Kayla Whaling said. "The money will take the form of special bonuses and new guarantees. It will be in place for the next several months."

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Whaling gave several examples of how the individual bonuses and new guarantees would work with guarantees that Uber recently deployed. In Austin, Texas, drivers receive $1,100 after making 115 trips; in Phoenix, drivers earn $1,775 when they make 200 trips; and in Miami, drivers get $1,750 when drivers complete 185 trips.

A driver and passenger wearing protective masks exit the ride sharing pickup area in a car displaying Uber Technologies signage at San Francisco International Airport. (David Paul Morris/Bloomberg via Getty Images)

The goal of the stimulus money is to "welcome back" existing drivers and incentivize new drivers, Cinelli wrote.

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Cinelli lists median hourly earnings for Uber drivers after Uber's service fee -- and before tips and driver expenses -- as $31.03 in Philadelphia, $28.73 in Chicago, $26.66 in Austin, $26.05 in Miami and $25.94 in Phoenix.

But earnings for drivers fluctuated during the pandemic. One driver told Business Insider in April of 2020 that he was making just $2.50 an hour despite making nearly $200 an hour before the pandemic due to lack of demand. Uber classifies its drivers as independent workers, so they are not eligible for minimum wage and other health benefits that regular, full-time employees receive.

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Uber and rideshare app Lyft took significant hits during COVID-19 as remote work, as well as fears of the virus and confined spaces, caused a significant decrease in rider demand. Both companies implemented mandatory mask-wearing for drivers and riders, as well as other safety measures, early on in the pandemic to help prevent transmission of the virus.

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Uber's delivery business kept the company profitable in 2020, according to its fourth-quarter earnings call in February. Uber Eats was up 130% in the quarter while its ride-hailing unit was down 47%. The delivery business pulled in $10.1 billion compared to $6.78 billion for ride-hailing in the fourth quarter. Uber's net losses for the quarter amounted to $6.77 billion, a 20% improvement from its $8.51 billion loss in 2019.

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Uber CEO Dara Khosrowshahi reiterated several times during his call with analysts in February that he was “optimistic” the company’s ride-sharing business would “start growing” again, but expressed concerns about Uber not having "enough drivers to meet the demand we are going to have.”

In 2020, Uber paid out over $22 billion to drivers and delivery workers.

Fox Business' Lucas Manfredi contributed to this report.