Ridesharing operators are forewarned: “lower demand” is coming if the rising costs of rideshare services cannot be controlled, a report revealed.
Lower demand?
Gridwise, a gig worker app provider, released a report recently saying that the rising cost of ridesharing services may lead to lower demand.
“The gig economy is shifting fast, and businesses need to stay ahead…,” Gridwise stated. “With 72.3 percent of passengers ready to walk away from rising fares and delivery workers now relying on tips for half their income, the landscape is changing.”
The experts added their findings saying that the median price for rideshare services, tips excluded, rose 7.2 percent last year after increasing by 7.6 percent the previous year prior.
Gridwise also indicated that these unfavorable trends are due to inflationary pressures, base fare adjustments, high operational costs, and fuel and vehicle maintenance costs.
Customers agree?
The Gridwise report also included perspectives from consumers. Aside from the 72 percent who said they are ready to reduce or stop the use of rideshare services due to price increases, there are also those 52 percent who said they will reduce their rideshare usage for the same reason.
However, some consumers, about 19 percent of those surveyed, won’t be changing their rideshare usage habits even if prices go up.
“This highlights the importance of operational efficiency and cost-effectiveness in retaining users,” the report said.
Yet, there are achievements
This report may be alarming, but the recent market performance of the biggest ridesharing platforms does not reflect the results of the study. Uber has called this season their “strongest quarter ever.”
“Uber ended 2024 with our strongest quarter ever, as growth accelerated across MAPCs, trips, and Gross Bookings,” stated Dara Khosrowshahi, the Uber CEO. “Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive opportunity presented by autonomous vehicles. We enter 2025 with clear momentum and will continue to be relentless against our long-term strategy.”
For instance, Uber’s gross Bookings grew 18 percent year-over-year to a whopping $44.2 billion, while revenue grew to $12 billion.
The same goes with its competitor, Lyft. In a financial report released shortly after Uber unveiled theirs, last year was a “record-smashing year” for them.
During the fourth quarter of last year, gross bookings were $4.3 billion, up 15 percent year over year, while revenue was up $1.6 billion, up 27 percent year over year.
However, its chief executive officer, David Risher, buckled up, seemingly agreeing to the Gridwise report, indirectly.
“The reality is when prices go up, rides go down and vice versa,” Risher said during the company’s quarterly earnings call. “Quarter by quarter, that’s going to happen. We’re seeing great demand. We’re super excited about what lies ahead.”
Gridwise is a delivery driver and rideshare assistant app independent of popular ridesharing platforms, which helps drivers maximize earnings and increase profitability.