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City comment: Petrol crisis is a headache that Uber doesn’t need

·1-min read

Have you tried getting an Uber recently? Good luck.

Anecdotally, wait times are longer and the costs are higher when a car does turn up.

Uber claims the problem is sky-high demandpeople are getting out of lockdown and demanding cabs at record rates. That’s pushing up surge prices.

But supply looks like a problem too. A recent survey of around 1200 drivers found 49% switched jobs during the pandemic.

A boom in gig economy firms means drivers can easily find employment elsewhere. Jobs are on offer at rivals like Bolt, food services such as Deliveroo or 10-minute grocery apps like Getir and Zapp. And with one million vacancies in the economy at large, drivers can switch careers entirely relatively easily.

Many are unhappy with Uber’s decision to increase the service fees it charges. Drivers this week staged a one-day strike in protest over pay and alleged unfair sackings.

There’s no let-up on the horizon for Uber. Wages are rising across the economy, which will continue to lure drivers elsewhere or force Uber to increase pay. Costs were already rising due to the recent UK Supreme Court ruling classifying drivers as workers, not self-employed.

The ongoing petrol crisis is yet another headache, although the company insists it is mitigating the effects.

Uber shares are down almost 10% in New York so far this year. The company’s customer-first, marketplace model worked well when jobs were scarce. In an era of labour empowerment, things look dicier.

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