Uber CEO flies to London to deal with driver crisis

Uber’s chief executive Dara Khosrowshahi flew into London for 24 hours earlier this week to tackle the company’s driver crisis, as it faces a shortage of 20,000 drivers ahead of the peak Christmas season.

In his first international trip since the beginning of the coronavirus pandemic, Khosrowshahi launched a charm offensive at Soho House for Uber drivers and members of the GMB trade union.

“We need more of you, so tell your friends!” he said, in a speech to the drivers.

On Thursday, Uber said it would raise driver pay in London by 10 per cent to try to tempt drivers on to its app. Last month, it said it would hand out bonuses of £500 for drivers who refer friends on to its platform.

Khosrowshahi told the Financial Times it was not clear why Uber was suffering a shortage of drivers, which has hit some users with long wait times or higher prices. But he said the shortage was “not just a London issue, but a nationwide issue” and that it was a priority for him to solve.

Some drivers may have quit during the pandemic, while others have complained that the fuel crisis and the spike in the cost of cars have made working for Uber increasingly uneconomical.

“Petrol prices are at an all-time high, the costs of operating are extremely high for drivers,” said James Farrar, a former Uber driver who has since set up the drivers’ union Worker Info Exchange. He said the problem was that Uber is still “offering fares at a price that the driver is not prepared to accept” in order to maintain its market share against fierce competition.

Khosrowshahi insisted that Uber has “the same number of drivers as we had pre-pandemic in 2019” but that there had been a spike in demand as the UK emerged from the pandemic.

“Demand normally rises at 10-15 per cent every year, but it’s growing much more quickly after the pandemic,” he said. Uber said demand had risen 20 per cent in London, up to 30 per cent in Birmingham and Manchester and 40 per cent in Nottingham.

Uber also currently has about 10,000 drivers on its books who have not been active in the past few months, many of whom may have switched to food or package deliveries during the pandemic and have not returned to driving. Uber said it could “fix half the problem on supply overnight in theory” if they could tempt these riders to reactivate.

Khosrowshahi also met the London mayor Sadiq Khan for the first time, in an encounter brokered by the GMB union.

Uber has struggled to meet demand in the US too, with drivers being slow to return to ride-hailing platforms. In April, Uber announced it would spend $250m on a one-time “stimulus” package to increase incentives for its drivers in the US.

Source link

Back to top button