The New Reality for Uber and Lyft: Fewer Drivers, Savvier Customers, and Uncertain Investors
Companies are reducing expenses, reintroducing lower-priced rides, and exploring new methods to attract drivers.
Market-research firm YipitData reports that because to the labor shortage and high gas prices, the average U.S. fare for Uber and Lyft reached a record high last month. Together, the companies saw at least 20% fewer riders and 35% fewer journeys in the first quarter compared to the same period in 2016, per data compiled by YipitData. Once states began phasing out unemployment benefits due to the pandemic last year, businesses hoped the labor crisis would ease. Nevertheless, the need for drivers has not been met by the available workforce.
Investors and industry watchers alike are wondering how big the market for ride-hailing services really is in light of this predicament. To deal with this tenacious set of problems, businesses are reintroducing ride-sharing, or picking up numerous passengers who each pay only a portion of the total fee. During the height of the health crisis, carpooling was put on hold.
Uber has partnered with its archrivals, the taxi industry, to expand its pool of on-demand drivers. Lyft has promised more compensation for its drivers. Meanwhile, both businesses are limiting employment and spending to reduce overhead. Lyft President John Zimmer stated in a message to employees on Tuesday, which was obtained by The Wall Street Journal, “Our near-term action plan will be focused on boosting profits—whether we like it or not, that’s the ticket of entrance in today’s market.” Shares of Lyft and Uber have both dropped by over 65% in the past year, while the Nasdaq Composite Index has dropped by less than 20%. Companies are looking for a way to increase earnings while yet remaining affordable in order to attract and retain a larger consumer base. It is in Uber’s best interest to make the service accessible to as many people as possible, according to Andrew Macdonald, the company’s global mobility head, who issued a statement through email.
In an effort to attract budget-conscious riders, Lyft has launched its first marketing campaign this month emphasizing the benefits of using the company’s rental bikes. Uber introduced new features this week that are designed to make reserving rides faster and more affordable. One option allows users to pay for their Uber rides with vouchers for special occasions like weddings, while another automatically imports hotel and travel reservations from Gmail and suggests prebooking rides.
Uber and Lyft have lowered their fare pricing for years. Although the corporations lost a lot of money due to the discounts they offered, they were able to increase their customer base by the tens of millions. After going public in 2019, the corporations shifted their focus to increasing profits, only to be devastated by the pandemic. They had trouble getting enough riders, and then they had trouble getting enough drivers. The lack of drivers continued longer than projected, driving up prices throughout the industry in 2017. Then, just when prices had leveled down, surging gas costs prompted yet another increase. New costs were added by the corporations in order to compensate drivers.
According to YipitData, average U.S. fares increased to a new high in April, 35% more than they were before Covid-19. Both Uber and Lyft have stated that they anticipate fares to fall, but that they would likely not return to their pre-epidemic levels because of the companies’ primary focus on profitability. Youssef Squali, an analyst with Truist Securities, recently stated, “The days of ride-share being a cheaper alternative to other modes of transportation are gone.” It appears the market is not as big as we imagined it would be two or three years ago.
There were around three million fewer Lyft riders in the first quarter of 2018 compared to the same period in 2016, a 13% decrease. The number of riders in April was approaching pre-pandemic levels, but Uber reported at least a 20% drop in U.S. trips for the quarter. A former frequent user of rideshare services, 31-year-old San Franciscan Sharan Godya is now more likely to take the bus for shorter distances. “I’ve never done that before,” he admitted.
Companies say they are making more money now than they were before the outbreak because of increased fares and that they anticipate a recovery in both ridership and trip volume. Uber reported that its user base and trip volume have returned to pre-pandemic levels in countries outside of the United States, but have been slower to recover in the United States due to the greater impact of the recent Omicron wave.
Both businesses are placing their hopes on shared rides bringing back frugal clients. In November, Uber began them again in Miami, and by the end of the year, they will have expanded to 15 additional cities. Pooled rides on Lyft have been available again in San Francisco and other cities as of earlier this month. In a note to employees this week, CEO John Zimmer announced plans to roll out the service nationwide in an effort to “Win riders via affordability.”
Uber is partnering with existing taxi companies in several areas to increase its driver pool and lower operating costs. Employing a known taxi service will lessen the need to offer incentives to attract drivers. Both companies have stated that they cannot reduce bonuses to the point where they risk losing drivers due to the increased competition for gig workers. Sergio Avedian, who writes about his experiences as a driver on his blog The RideShare Man, has driven for seven different ridesharing applications, including Uber and Lyft. Nobody can be trusted.
For journalists and academics, the Knight Institute has requested that Facebook change its policies
According to Reuters: Those who filed suit to prevent President Trump from barring his detractors on Twitter have moved on to Facebook.
The Knight First Amendment Institute disclosed Monday’s letter to Facebook CEO Mark Zuckerberg, in which it proposed modifying Facebook’s terms of service to establish a protected zone for journalists and researchers studying the social networking site, on Tuesday. The letter warned that under Facebook’s present policies, investigators risk not only being banned from the site but also facing legal consequences under the Computer Fraud and Abuse Act. Knight is advocating for a change in Facebook’s policies that would make it possible for legitimate journalists and researchers to scrape data and create temporary accounts for study purposes.
The letter stressed the importance of “digital journalism and research” in helping the general people comprehend Facebook’s platform and its societal impact. The tools that are typically necessary for this kind of journalism and study are explicitly forbidden by Facebook’s terms of service.
Three journalists, including New York Times’ Kate Conger and Gizmodo’s Kashmir Hill, as well as researchers from Princeton and the University of Michigan, were represented in Knight’s letter. Hill of Gizmodo published a story shortly after Knight revealed its letter, detailing how Facebook had tried to pressure Gizmodo into taking down an open source tool it had developed as part of its investigation into the company’s People You May Know feature on the grounds that it violated Facebook’s terms of service. (Anyone who downloaded the app would be able to see if Facebook suggested them as friends to those whose profiles they had seen.) The tool is still available, but Hill argues that the incident demonstrates the need for a safe haven for journalists and researchers.
I questioned Ramya Krishnan from Knight if the safe harbor could be used by competitors of Facebook or data-mining organizations looking to make money off of Facebook user data. (The Cambridge Analytica issue involving Facebook is probably still fresh in your mind.) Knight suggests the following safe harbor qualification criteria: Researchers must have a public interest rather than a commercial one, and they must take reasonable precautions to not mislead Facebook users about the identity of the people behind their temporary research profiles. According to Krishnan, these caveats would ensure that negative actors are not afforded the safe harbor. If suspicious behavior is uncovered, the Knight Institute envisions Facebook-employed monitors deciding whether or not it merits safe harbor protection.
The question of whether or not Cambridge Analytica would have been protected under the safe harbor has been considered, Krishnan added. A resounding “no”
Of course, this is all speculation. The only action taken by Knight so far has been a request to modify the service’s terms. The firm is under no obligation to respond to the letter, and it’s hard to picture Facebook inviting fresh criticism by declaring itself the final authority on whether or not journalists and researchers who scrape data and utilize masked accounts are legitimate.
In spite of Knight’s letter, Facebook shows no signs of rushing to alter its current policies. In an email response, Facebook said, “We appreciate the Knight Institute’s ideas.” Campbell Brown is Facebook’s head of global news partnerships. “Journalists and researchers play an important role in holding us accountable when we get things wrong and in educating the public about corporations and their goods. We do have stringent constraints on how third parties can use people’s information, and we do acknowledge that these sometimes come in the way of this effort. According to the company’s statement, Facebook already provides some resources for journalists and promises to provide a new software-building tool to examine the performance of political ads on the platform. There was no indication in the announcement that talks with Knight about a media and academic safe haven would be initiated.
No matter what the future holds for Facebook and the Knight Institute, the threat of civil and possibly criminal liability under the CFAA for terms of service violations is raised by Knight’s letter. You may remember (as I explained in an article last August) that the definition of “hacking” in the 1986 anti-hacking law is vague. While it may be obvious that hackers using stolen credentials obtained from the dark web are breaking the CFAA, what about a data scraper mining publicly available information, as was the case in a lawsuit filed against LinkedIn last year? Or consider Gizmodo, whose open source tool first required Facebook users to enter their login credentials so that the program could access the site automatically.
Gizmodo was not accessing or even collecting data from individual Facebook accountholders’ computers. Hill claimed on Tuesday that Gizmodo feared legal action after Facebook warned it that their tool breached Facebook’s terms of service.
Although Knight’s letter recognized that Facebook had not made that allegation in litigation against a journalist or researcher, it did note that both Facebook and the Justice Department have cited the CFAA in connection with terms of service violations. (The most well-known instance of the company’s use of the statute was in a case against the then-emerging social networking site Power.com; the 9th U.S. Circuit Court of Appeals found Power.com liable for CFAA violations, 844 F.3d 1058, because it had continued accessing Facebook computers despite having been sent a cease-and-desist letter.)
Due to concerns about criminal liability under the CFAA for violations of terms of service, a group of journalists and researchers filed a lawsuit against the Justice Department in 2016, arguing that the CFAA violates the First Amendment to the extent that it forbids the collection of publicly-available data related to online discrimination. While dismissing most of the plaintiffs’ claims in Sandvig v. Sessions (2018 WL 1568881), U.S. District Judge John Bates of Washington in March kept alive First Amendment allegations by two researchers who said they feared prosecution if they carried out plans to create fake user accounts to test discrimination at employment websites. The Department of Justice has requested that Judge Bates allow discovery into which places the investigators want to visit.
Similar research methods and public-benefit objectives are mentioned in both the Sandvig suit and the Knight letter. Is the Institute thinking about going to court to get the same shield from CFAA civil liability that Sandvig’s ACLU attorneys are trying to get for him in the criminal context?
No comment from Krishnan at Knight just yet. She emailed me to tell me that the institute is still waiting for Facebook to respond to its “safe harbor” proposal. “The suggestion is made in good faith and with constructive intentions,” she stated. We’ll observe how Facebook reacts before making any further plans.
The fascination of American IT companies with ShareChat, India’s most popular social network
ShareChat makes it simple to start chatting with others in a country where many people are just now getting access to the internet. It also doesn’t bother with English support.
The biggest names in technology are running out of room to expand. Most of these companies have been looking to India as a source of new customers because more Indians have joined the internet in the past few years than live in the United States. ShareChat is the company that has shown to be the most successful in reaching this country’s eccentric population. ShareChat is an India-focused social network with headquarters in Bangalore, often called India’s Silicon Valley. It supports more than a dozen regional Indian languages and has many of the features you’d expect from a social media platform, such as a feed based on your interests and the people you follow, the ability to share text, images, and videos, and the ability to comment and like other users’ posts.
ShareChat was built to take advantage of the exploding content consumption in India. It’s meant to encourage new internet users to continue browsing the web and, more significantly, to continue sharing information via WhatsApp, the most widely used messaging program in the country. ShareChat is more like Reddit than Facebook or Twitter, and it doesn’t require you to follow or friend someone to get started. Upon first logging on, you’ll see a range of posts in the language of your choice, including news, tabloid gossip, good morning messages, and more. ShareChat also has public chat rooms where you may join at any time and start talking to complete strangers, a typical internet advantage that is especially appealing to first-time users in India who are coming online from rural areas. ShareChat also features a function called “Shake-N-Chat” that pairs random users talking about comparable topics together for a one-on-one conversation. ShareChat’s largest departure from standard social media is its lack of an English language choice. That’s a big reason why the biggest names in western technology have taken notice. Twitter’s only other startup investment is in ShareChat (twice). It’s thought to be on the edge of raising more money from Google and Snapchat. There was also speculation that Google might buy ShareChat for a billion dollars.
An Enormous, Competitive Market
Google, like many other Western IT firms, has become increasingly frequent in its betting on Indian startups. Reliance Jio is the largest telecom provider in India, and it has lately received hundreds of millions in investments from tech giants like Google, Facebook, Qualcomm, and Intel. In addition, the news aggregator and content app DailyHunt received funding from Microsoft and Google towards the end of last year.
Not only that. The cost of gadgets and internet service is a key concern in India, where the typical family income is roughly $3,600, so most of these tech companies have spent a lot of time over the past few years attempting to optimize their services for the country. For instance, you can dial a toll-free number to have a conversation with the Google Assistant offline. Amazon offers a battery-operated version of its Echo smart speaker for use in areas of the country without reliable access to electricity. Dumbphones can access social media and newsfeeds from the likes of Facebook, Google, and Twitter. For about $3 per month, Netflix subscribers may watch TV series and movies in standard definition (SD) on their mobile devices. The run-on list is infinite.
It’s easy to see why India has captured the attention of tech companies. Around 650 million people call it home for their internet access, making it the second-fastest expanding internet economy. Cisco predicted in 2018 that by 2023, this number would have surpassed 900 million.
Wireless provider Reliance Jio deserves much of the credit for India’s digital revolution because, beginning four years ago, it began offering cellular 4G services at rock-bottom pricing, pushing the rest of the market to follow suit. (Most didn’t or were absorbed into larger corporations.) These days in India, you can get a 4G plan that includes unlimited calling and 2 GB of data each day for less than $4.
Tech businesses can’t afford to miss out on the massive market potential in India, where just around half of the population is online compared to the United States and the United Kingdom, where over 90% of the population is online.
Only 10% of Indians speak English, and most of the country’s internet users come from non-English-speaking rural areas, making it difficult to break into the Indian market. Nine out of ten Indian internet users are expected to adopt regional languages in the near future.
That’s where we (and ShareChat) come in. Its non-English social network boasts 160 million monthly active users who spend an average of 31 minutes per day within the app, putting it on par with market leaders like Facebook.
Moj (which means “entertainment” in Hindi) is a short-form video app that was released by ShareChat and quickly gained 80 million monthly active users. Moj, in contrast to ShareChat, is written in English. ShareChat’s rapid expansion can be partially attributed to the fact that the government of India has outlawed dozens of Chinese apps, including the popular one TikTok. ShareChat was launched in 2015, but 100 million of its current 160 million users joined in just the past year.
Amit Sharma, an analyst at GlobalData, notes that consumers who are new to the internet, let alone social media, often lack the literacy skills necessary to understand how discovery functions. ShareChat gets rid of that problem by delivering the material directly to the user. Companies like Google and Twitter can utilize this technique to enter new markets and make money from advertising to those people they acquire.
According to Sharma, “[ShareChat] encompasses a massive following in Tier II, III, and IV cities and towns,” which is why the app is such a hot commodity among Western technology firms.
SoftBank and Riverwood lead a BRL 500 million round for the Brazilian Gupy
Human resource IT firm Gupy has an assertiveness rate of 70%, 22.5 million users, and 1,500 client organisations.
SoftBank Latin America and Riverwood funds led the BRL 500 million investment, with participation from Endeavor Catalyst, Oria Capital, and MAYA Capital. Gupy is a Brazilian HR technology firm with 22.5 million registered customers. In Latin American history, this is the largest investment in an HR platform.
Gupy was established in 2015 by Mariana Dias, Bruna Guimares, Guilherme Dias, and Robson Ventura. The company is most recognised for its AI-based solutions that automate and boost the assertiveness rate in the recruitment and hiring processes. The startup is active in Mexico, Argentina, Chile, Uruguay, Paraguay, Bolivia, Costa Rica, Colombia, Venezuela, and Peru, and serves more than 1,500 enterprises across a wide range of industries, including Ambev and Renner, Ita, and Santander. The platform, which claims a 70% assertiveness rate, was responsible for 480,000 hires in 2021.
Gupy operates in a challenging industry because the hiring and selection procedures are frequently criticized by applicants and a big source of stress for HR managers. Candidates and hiring managers alike should be able to count on a straightforward, welcoming, diverse, and confident procedure that makes efficient use of everyone’s time. This is especially true if the gap widens between the supply and demand for work from home opportunities.
In an interview with LABS, Gupy CEO and co-founder Mariana Dias explained that the company was founded with the goal of increasing job opportunities in Brazil. Now, issues of diversity, equal opportunities, and a lack of qualified labour have entered the conversation about employability as a key factor. Gupy figured out just where to put itself in this setup.
The company initially offered an AI-driven recruitment solution, but it quickly realized that the HR sector was in need of more and launched two additional solutions: a product that automates the entire hiring process (Gupy Hiring), and a corporate education solution (through the acquisition of Niduu), which uses micro learning and gamification to train, upskill, and reskill employees.
Rapid transformation in the labour market has made recruitment the key to success. What can be done to enhance the recruitment process for everyone involved? This was exacerbated by the epidemic, and human resources technology began evolving to meet the ensuing need for new hires and skill updates. To what end might hundreds of fresh workers be hired from afar? How can businesses help their employees update their skills and stay with the company? Gupy has been attempting to apply cutting-edge research and development to these problems.
CEO AND CO-FOUNDER OF GUPY, MARIANA DIAS
Gupy’s newest offering, released in July, responds to a pressing need in the labour market by providing a diversity solution to broaden access for underrepresented groups and assist businesses in creating more equitable, varied, and inclusive recruiting practices. “The diversity agenda is becoming a much larger focus for businesses. Our product provides firms with the technical and legal support they need to find and hire diverse talent.
Companies who adopted the diversity solution hired 55% more workers from underrepresented groups in the first month. The average rate rises to 72 percent in just four months. When comparing August and September of 2019 to the same months in 2020, Gupy noticed a 127.8% rise in the number of hires that identified as women, people of color, LGBTQIA+, or persons with disabilities.
Gupy plans to utilize the funds to increase the number of businesses that use its platform, as well as to create innovative solutions for the HR supply chain that cater to both employers and job seekers.
Portal de Vegas, a free marketplace where job-seekers can locate over 20,000 openings from organisations all around Brazil, was launched as the first step. Filters to help identify the best-fit positions and understand the competition for the post are just two examples of the upcoming additions to Gupy’s feature set.
To help talents, employees, and HR professionals, “our focus, for now, is Brazil; we will continue developing the HR employability chain, from recruiting to training,” stated Mariana.
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