After a decade of false starts, regulatory hurdles and a pandemic-induced stall-out, ride-hailing may finally gain momentum in B.C. this summer as the prospect of mass vaccinations potentially loosens travel and gathering restrictions.
But meeting pent-up demand for rides home from bars, trips to ferry terminals and commutes to the office could be stymied by a lack of drivers.
Uber Technologies Inc. (NYSE:UBER) CEO Dara Khosrowshahi told investors earlier this month one of the company’s top priorities will be to rebuild its driver base following the pandemic.
“As vaccination rates arise, infections fall and restrictions lift, people quickly, breathe a sigh of relief and start moving again,” Khosrowshahi said during a May 5 earnings call. “There’s pent-up demand to see family and friends, offices, restaurants and bars are reopening, and even airports are seeing improved traffic.
“Our research shows that drivers who left the platform last year primarily did so for two reasons – concerns about safety and concerns about there being enough rider demand.”
But, he added, demand in the U.S. is now outstripping supply.
Uber pledged earlier this year to invest US$250 million to boost earnings for drivers in a bid to bolster its ranks.
Ride-hailing operators in B.C. already faced hurdles recruiting drivers prior to the pandemic, with the province requiring drivers to possess Class 4 licences rather than the more common Class 5 licences.
Peter Lukomskyj, general manager of Lyft Canada Inc.’s operations in B.C., said he anticipates demand for local drivers to further ramp up, and earnings along with it.
“We saw that 23% of drivers in Metro Vancouver drove more during the pandemic because they were laid off or maybe had hours reduced,” he told BIV.
But Lukomskyj also expects drivers who drifted away from offering rides during the pandemic to return to the platform.
Lyft recently partnered with Toyota Motor Corp. to recruit drivers who either don’t own a vehicle or are wary of using their own to offer rides. Those potential drivers will be able to rent Toyota vehicles and offer rides through Lyft.
The Uber and Lyft business models depend on surge pricing, allowing the companies to boost rates as demand swells.
So with the potential for fewer drivers on the road as demand rises in B.C., riders will face longer wait times and higher prices than they did before the pandemic. It’s a prospect that could make it more difficult for ride-hailing to gain traction in B.C.
Meanwhile, the regulatory body for ride-hailing services in B.C., the Passenger Transportation Board (PTB), has approved 23 applications from operators wishing to offer services in the province, making the acquisition of drivers more competitive.
B.C.-based operators, such as ReRyde Technologies Inc., have taken to offering $500 bonuses to applicants who become drivers.
Also among the approved applicants is Yellow Cab Company Ltd., which has been operating as a taxi service in Vancouver since 1921.
The local taxi industry has long opposed ride-hailing services in B.C. But the arrival of ride-hailing as well as the changes in transportation habits during the pandemic has resulted in a significant departure of Class 4 drivers from the local taxi industry.
Yellow Cab’s application stated it wants a ride-hailing licence to comply with regulations pertaining to when trips are hailed and paid for by an app, and the PTB noted in its decision that Yellow Cab believes obtaining the ride-hailing licences will make it more competitive.
Lukomskyj, meanwhile, remains confident Lyft can meet future demand.
“As vaccines roll out, I think everybody’s looking forward to those days where we can just get out and start exploring the region,” he said. “We’ve got a pretty strong pent-up demand for getting out there again and we really are just waiting to be able to help with supplying that demand.”
