Ridesharing’s Rebound is Stuck in Traffic

Ridesharing’s rebound is taking longer than expected as activity in major cities remains stagnant due to fears related to the pandemic and the reimplementation of strict social distancing requirements by certain states. 

Discretionary trips on hold: Uber disclosed they expect Bookings to be down 75% Y/Y in Q2, and the slowdown in discretionary trips is causing a delayed return to ridesharing mobility. RBC analyst Mark Mahaney says there does not seem to be enough easing of restrictions to drive material upside to discretionary trips within key cities such as NYC, LA, CHI, and SF. RBC estimates about 60% of trips that are non-commute, business related, or airport, account for about 60% of rides, which have been slow to recover. 

• Outlook for air travel: Trips to and from airports account for roughly 15% of Uber’s Bookings and approximately 9% of Lyft’s rides in Q3 and Q4 of 2019. RBC notes that the return of domestic air travel has potential to be a near-term catalyst for Uber due to the fact 95% of its Gross Bookings come from trips in a user’s home country (2019).

International indicators: In its “Mobility Matters” update, RBC emphasizes a return to normal for overseas ridesharing giants Didi Chuxing (China) and Yandex Taxi (Russia). RBC notes that “Didi disclosed seeing ridership in China return to pre- pandemic levels in June, surpassing 30 million daily rides, and Yandex Taxi started seeing pre-COVID rides growth levels in early June.”