The Days of The Low-Cost Gig Economy Are Over

There was a time when you could Uber to the airport for $15 and catch all the flicks in theaters with MoviePass for $9.95 a month. There was also a time when you could see a John Wayne Western for…

Jennifer
Image Credit: Uber.com
Sign up for insightful business news.

There was a time when you could Uber to the airport for $15 and catch all the flicks in theaters with MoviePass for $9.95 a month. There was also a time when you could see a John Wayne Western for 50 cents.

But as always – the times, they are a-changin’. Travel, social, and ride-hailing apps – which once courted users with low prices to undercut competitors – can no longer afford to subsidize their services in the name of building a customer base. And new data is revealing that hard truth.

It’s a Bird… It’s a Plane… It’s a Price Increase

Service apps have been on a belt-tightening regimen for a few years. Some – like MoviePass, laundry app Washio, valet parking service Luxe, and used car seller Beepi – simply ran out of cash and shut down.

And those who survived to see 2021 are sticking customers with the bill:

  • Doordash lost over $250 million during the pandemic and was slapped with a cap in 73 U.S. cities on the amount it can charge restaurants. In response, it’s joined other food delivery apps in steadily raising fees for customers.
  • The daily rate for an Airbnb rental was 35% more expensive in the first quarter of 2021 than a year earlier.
  • And the average Uber or Lyft ride is 40% more expensive than it was just a year ago, according to Rakuten Intelligence.

Uber and Lyft are no longer dangling cheap rides to undercut competition and woo customers. In fact, a driver shortage is prompting them to woo workers – ride-hailing earnings climbed to $25 an hour in May from $18 in January.

Frustrating: “Today my Uber ride from Midtown to JFK cost me as much as my flight from JFK to SFO,” griped Sunny Madra, a vice president at Ford X.

Obvious: While zipping across town should probably be more affordable than traveling cross-country, maybe a ride to the airport should never have been just $15 in the first place?

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

A Strong Dollar Could Save a Horrid M&A Environment

Retailers Struggle to Move Inventory, Slowing Shipping Industry

Disney and Dish Go To War in Contract Renewal Negotiations

Minneapolis Businessman Latest American to Vy for English Soccer Ownership

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>