Uber, Lyft Riders Return As Delta Variant Surges, Drivers Steer Clear

Uber and Lyft have finally started to see riders return to the on-demand transportation service, but that bounceback could be short-lived if the Delta variant of the coronavirus continues its surge and drivers continue to resist a return to sharing their vehicles with passengers who might be contagious.

Uber has shifted its focus to delivering goods and meals, as ridership plummeted for more than a year following the initial COVID-19 outbreak. The companies might have to find other ways to achieve their profit goals for 2021 if the variant forces more municipalities to consider mask mandates or lockdowns.

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Lyft has said it will achieve profitability by the end of the third quarter, while Uber said it will be in the black by the end of the year. Those predictions were based on cost-cutting moves by both companies and the expectation of a second-half boost in ridership as coronavirus fears started to wane.

But with the Delta variant surging, it will be tougher for both companies to lure their drivers back or to find new ones, even with the promise of large pay incentives.

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Myriad economists expect that people will adapt to restrictions related to the Delta variant as they did during the pandemic, and that this new contagion won’t have a considerable impact on growth.

U.S. gross domestic product (GDP) in the second quarter grew at a 6.5 percent annualized rate, with consumer spending climbing sharply at an 11.8 percent annual rate. Spending on services contributed the most to the change in GDP, followed by purchases of goods.

GDP in the second half of 2021 is anticipated to lose momentum, according to economists. However, they forecast that consumer spending will continue to grow the economy. The labor market is continuing to improve, and the additional child tax credit should result in robust consumer demand for goods and services.

Goldman Sachs said last week that the second half of this year will see an economic contraction with a drop in consumer spending and an increase in the number of Delta variant cases. Goldman’s perception also indicated that growth will continue to lose momentum after 2021.