Uber CEO Dara Khosrowshah has been shocked to learn how pricey fares have become.
During an interview with Wired, writer and editor Steven Levy asked the company boss to guess the price of his 2.95-mile Uber ride from downtown New York City to the West Side.
Khosrowshah assumed it was ‘20 bucks’, but was surprised to learn his calculations were way off.
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Levy revealed it was actually $51.69, including a tip for the driver.
The CEO responded: "Oh my God. Wow.”
But Levy added that wasn't the worst of it.
Initially, when he tried to book, the price was $20 higher, adding: "It's 10am on a sunny weekday, and it's not like the President's in town."
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Khosrowshahi proceeded to chalk the soaring price to inflation.
"Everything is more expensive. Inflation has become a part of our everyday life," Khosrowshahi responded.
"With Uber, the vast majority of your fare is going to your driver.
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"Earnings per week for our drivers are up 40, 50 percent over the past four years, because that is the cost of time and the cost of labor. I think that's positive."
According to CNBC, the cost of ride-sharing apps like Uber and Lyft have skyrocketed 92 percent from 2018 to 2021, as per data from Rakuten Intelligence.
Rakuten's data also revealed that Uber fares in April 2021 were up 40 percent year-over-year.
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Refinery 29 reported that supply and demand had surged in the past couple of years thanks to the pandemic, as many drivers quit and looked for other work.
"When the pandemic hit in 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time," an Uber spokesperson told the outlet.
As ride demand increases with driver supply still low, prices continue to soar.
And 2021 was a challenging year.
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"In 2021, we’ve seen more riders requesting trips than there are drivers available to give them,” they added.
But to fix this labor shortage, Uber has launched a $250 million driver stimulus to boost drivers' earnings and get them back on the roads.
“We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels,” Dennis Cinelli, Uber's former Vice President, US & Canada Mobility, said.
Charisa Bossinakis