Labor Shortage Affecting Rideshare Industry
Alto uses scheduling to reduce wait times, avoid surging prices
As more people get vaccinated against COVID-19 and resume traveling, many may have noticed it’s harder and more expensive to book flights and rental cars.
Ridesharing is no exception.
“Just like many industries, including restaurants and airlines, the demand is increasing quicker than supply is returning. The bounceback to pre-pandemic activity is simply outpacing supply in most sectors,” Dallas-based rideshare company Alto founder Will Coleman said. “For consumers, this can mean waiting longer while supply chains catch up. In ridesharing broadly, this may mean you have to wait a bit longer for a ride, and in some cases, pay more for your ride.”
Rideshare companies like Uber, Lyft, and Alto are working to get drivers back on the road to meet the increased demand for rides.
“Rideshare companies are working hard and creatively to get more drivers on the roads to keep up with the increased demand. This need for supply and labor isn’t limited to the rideshare industry – many industries of all different types, especially anything hospitality-related, are experiencing increased demand at a rapid, unprecedented pace,” Coleman continued.
Alto operates in Dallas, Houston, and Los Angeles. Its business model differs from other ridesharing companies in that drivers are W2 employees with benefits rather than contractors.
“Alto’s unique business model gives us tools to handle some of these challenges a bit differently. For example, we are scheduling driver shifts to align with busy times so we can best serve our customers’ needs without surging prices and giving our members in-app indications of times of ‘high demand’ so they can plan to call their ride a bit earlier if need be,” Coleman added.
Uber CEO Dara Khosrowshahi likewise said customers are experiencing longer wait times with the driver supply and demand issue.
“ETAs are higher than we want them to be, surge level prices have increased as we have not seen drivers supply keep up with the demand growth in the U.S.,” Khosrowshahi said at the J.P. Morgan Technology, Media and Communications Conference in May, as reported by CNBC. “The supply position is something we’re still working on. It’s definitely getting better, but we’re not happy with the ETAs and price levels we see, and that is something we’re going to invest to improve on.”
