Is Uber’s driver shortage finally over?

Uber says its chronic shortage of drivers is finally in the rear-view mirror, allowing it to focus on passenger complaints such as cancellations and wait times, according to a top executive at the global ride-hailing group.

The company’s ten largest markets, which together make up more than three-quarters of its bookings, all saw month-on-month driver growth in August, said Andrew Macdonald, Uber’s head of mobility. “That is indicative of a broad-based trend we are seeing around the world,” he added.

Globally driver supply is up 70 per cent year-on-year, while the UK hit 85,000 active Uber drivers in August, the highest number ever on the country’s roads.

Resolving its driver shortage has allowed Uber to turn its attention to addressing other customer complaints, including long wait times and drivers who cancel after initially accepting a trip, said Macdonald, a 10-year Uber veteran who took over global responsibility for its ride-hailing business in 2019.

Macdonald said the improvement in driver supply was down to a combination of cash incentives, platform improvements and inflationary pressures that are forcing more people to turn to gig work for extra income.

“When you look at the value of flexible work in times of economic uncertainty, we think Uber has a really powerful story to tell,” said Macdonald.

It is the first time since the pandemic began that Uber has seen such consistent and widespread improvement in its supply of drivers, after two years of frustration for passengers who were left stranded by a dearth of available cars.

“Access to charging in all neighbourhoods across the city is really, really critical. And I don’t think we’re there yet.

It comes almost a year after Uber’s chief executive Dara Khosrowshahi flew to London to tackle the company’s driver shortage, pledging to raise pay and offer £500 bonuses for referrals after many drivers left during the pandemic lockdowns. In the US, Uber pledged to invest $250mn to recruit and retain drivers last year.

Macdonald acknowledged user frustration caused by drivers accepting trips, only to cancel them before pick-up. Delays can also be caused when customers are matched and unmatched with several drivers because none of them opt to take the fare.

He said he was “very focused” on improving the technology that paired available drivers with the most appropriate customers, and calculating the right fee for each journey, in order to minimise the chance that a rider is let down.

“The biggest investments we’ve made in our tech stack over the past 12 months, on the mobility side of the business, have been about improving that dynamic,” Macdonald said.

While “substantial progress” has been made over the past 12 months, Uber is bracing for a “tight” end to the year as demand increases into the holiday season, he added.

Over the past year, in an effort to make the platform more appealing to drivers — and in some cases in response to legislation — Uber has dropped some measures it previously used to discourage cancellations, such as suspending drivers who cancel too often or offering them fewer rides.

In many of its markets, Uber has also introduced “Upfront Pricing” that displays the trip cost to drivers, as well as the pick-up and destination information. Previously, drivers would only see this once a passenger had got in their car.

Giving drivers more information upfront can decrease their acceptance rate, Macdonald said. Drivers might fret about heading to an area with low demand or simply do not think the fare is worth it.

“A lot of the technology that we’re working on is working towards doing a better job with that,” he said. “Ultimately, we think more transparency is better, and it’s our job to make sure that we’re pricing the trips correctly so that they’re not only accepted, but that they’re completed.”

The number of cancellations is one of five key consumer metrics that Macdonald says he checks several times every day. Others include average customer wait times and the portion of ride requests that are completed.

“All of those metrics have improved in [the second quarter of 2022] versus [the first quarter], as well as in July and August,” he said. However, that trend may reverse as demand ramps up in the final three months of the year, typically Uber’s busiest time of year for rides.

The knock-on effects of the pandemic are also a strain on Uber’s climate goals, which include removing internal combustion engines from its ride-hailing network in the US, Canada and Europe by 2030.

London is currently Uber’s most electrified city, with 7,000 electric vehicles registered on the platform, carrying out around 15 per cent of all trips, while the global average is still a single-digit percentage.

Macdonald credited London Mayor Sadiq Khan’s climate-forward policymaking for the city’s faster adoption, with the goal of the city reaching net zero carbon emissions by 2030.

In London, Uber pledged four years ago that all cars using its platform would be electric by 2025. While the company is not altering that goal, Macdonald acknowledged the task had become more difficult than when first set — primarily because of supply chain constraints limiting the availability of new and used electric vehicles over the past two years.

Uber is investing millions of dollars to bring more electric vehicles on to its platform. A tie-up between Uber and Hertz, the car-rental service, is helping more drivers get access to tens of thousands of Tesla vehicles in the US.

It has struck partnerships with charging network operators, including BP in the UK, to help finance installation of charge points, for instance at airports. But Uber wants more charging points installed in places where many of its drivers live, so they can replenish their cars’ batteries overnight.

“Access to charging in all neighbourhoods across the city is really, really critical,” he said, “and I don’t think we’re there yet.”