Report: Rising Cost of Rideshare Services May Cause Lower Demand
The rising cost of rideshare services may lead to lower demand, according to a report released Tuesday (Feb. 18) by gig worker app provider Gridwise.
The report found that the median price for rideshare services (excluding tips) rose 7.2% in 2024 after increasing by 7.6% in 2023.
“These trends reflect inflationary pressures, adjustments in base fares, and higher operational costs, including fuel and vehicle maintenance,” the report said.
About 72% of the consumers surveyed said they would reduce or stop their use of rideshare services if prices increased further, while 19% said they would not change their usage habits due to higher prices, according to the report.
Asked if they had changed their behavior in the past year due to pricing, about 52% of consumers said they reduced their rideshare usage for that reason, per the report.
Offering lower fares is the top way customers can retain rideshare users, the report said. About 56% of consumers said lower fares keep them loyal to a specific rideshare service.
“This highlights the importance of operational efficiency and cost-effectiveness in retaining users,” the report said.
Uber reported Feb. 5 that its Mobility segment achieved 24% year-over-year growth in gross bookings.
The company focused on increasing demand through product innovation, launching services like Uber Business Black and Uber for Teens, and expanding low-cost options like UberX Share and Uber Shuttle.
“Our Uber for Business offering is also seeing strong results, with gross bookings up approximately 50% year over year and there is still a long runway to further grow our share of wallet with the more than 200,000 companies and organizations we work with,” Uber CEO Dara Khosrowshahi said during the company’s quarterly earnings call.
Lyft reported Feb. 11 that it saw a 15% year-over-year increase in bookings, together with a 10% increase in active riders that brought the total to the highest level in the company’s history.
Despite the positive fourth-quarter and full-year results, Lyft’s outlook for the first quarter of 2025 appeared more cautious, as the company projected more modest year-over-year growth rate of bookings of 10% to 14%.
“The reality is when prices go up, rides go down and vice versa,” Lyft CEO David 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.”
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