Uber prices are still way up, so the company is bringing back carpooling
Uber is preparing to relaunch its carpooling service as a way to combat price increases, officials said in a call with investors. Uber Pool was shuttered in March 2020 in response to the COVID-19 pandemic and remained so even as vaccines became widely available and customers returned to the app.
But that could soon change, according to Uber CEO Dara Khosrowshahi, who hinted that a new shared rides product could be released soon. Along with its rival Lyft, Uber has been struggling to recover from the pandemic, as drivers fled the platform, wait times increased, and the cost of rides soared.
“We are launching an Uber shared pool product,” Khosrowshahi said. “We have been investing for years in a high-capacity product, which is looking more and more attractive as it relates to a unit economic basis, where that can bring the price significantly lower.”
Uber’s prices are up 20 percent compared to last year, slightly less than they were over the summer but still relatively steep compared to pre-pandemic prices. Introducing a low-cost carpooling service will help ease the demand for Uber’s main ride-hailing products, and hopefully bring those prices down more, Khosrowshahi said.
Uber Pool, the service that matches up to three riders in one car based on their destinations, was one of the cheapest options on the company’s platform. But drivers hated it, complaining about low customer ratings, an inefficient algorithm, and roundabout directions that tend to annoy riders despite the low fare.
COVID-19 put a halt to the practice of strangers sharing the backseat of a car. Cities like New York actually banned shared trips in an effort to slow the spread of the virus. Lyft also suspended its Lyft Line carpooling service.
When Uber Pool comes back, it may look different than the pre-pandemic version. Khosrowshahi hinted that it could be more like an employee shuttle service using Uber’s matching technology that the company can sell to its corporate client. A spokesperson called the employee shuttle a “separate effort” from the carpooling service, but declined to share more details.
That likely won’t affect the price of an Uber ride in the near term, though. Khosrowshahi acknowledged that the company is currently involved in “a giant pricing experiment that no one wanted to get into.” The company will continue to struggle with supply and demand problems as the effects of the pandemic continue to be felt.
But Uber reported that its Q3 gross bookings, or the amount of money it takes in before paying drivers, reached an all-time high of $23.1 billion, up 57 percent year over year, despite a 20 percent increase in prices.
“We’re seeing that as cities reopened, people start using the product,” Khosrowshahi said, “and they use our product a lot.”