After witnessing a ‘dramatic’ fall in business and drivers, rideshare companies are gearing up for a recovery

Some rideshare drivers have worked through the midst of the COVID-19 crisis. (Jeffrey Greenberg, Universal Images Group via Getty Images)
  • DiDi will begin to wind back key financial relief measures offered to drivers as the Australian government looks to relax restrictions and trip numbers again grow.
  • Having witnessed a “dramatic fall” in the number of rides Australians were taking, DiDi had slashed the commission charged to drivers to just 5% on all rides. It’ll now return to an amended form of its DiDi Advance program, which determines a driver’s pay by the number of rides they do each week.
  • Company spokesperson Dan Jordan told Business Insider Australia the change was necessary to create a sustainable business, and did not rule out following competitors into delivery services.
  • Visit Business Insider Australia’s homepage for more stories.

Under pressure rideshare companies are attempting to accelerate towards a ‘new normal’ in Australia.

Chinese rideshare giant DiDi announced on Tuesday that it will raise commissions on many of its drivers again, abolishing the low 5% commission it had introduced as businesses slowed to a crawl.

“We were transparent when we brought the 5% commission in that it was a temporary measure to help drivers get through what was a very difficult time. However, there was always going to be a time when we would need to reintroduce DiDi Advance to build a sustainable business,” DiDi spokesperson Dan Jordan told Business Insider Australia.

From 15 June, the company will return to an amended version of its DiDi Advance program which increases the pay of drivers the more they drive, now that it says ride numbers are increasing again.

Under the program, drivers encouraged to hit certain targets to lower their commission from a maximum of 20% to get back to the minimum 5% – a tiered program not without its criticisms.

Business Insider Australia understands those targets will, however, be reduced to reflect the contraction in business overall, with DiDi expected to release the new numbers closer to 15 June.

COVID-19 has pulled the handbrake on rideshare companies

While it striking an optimistic note for where the business is headed, COVID-19 has hardly provided a smooth ride for the rideshare industry, with Jordan confirming that there had been “a dramatic fall” in ride numbers.

“Weekend traffic was hit particularly hard. Australia has a really social use of rideshare and that’s obviously stopped [during COVID-19],” Jordan said, noting essential weekday travel to work and appointments had been more consistent.

“Since restrictions have begun to ease we’ve seen vast increases of trip numbers in each market, which is a really promising sign, and as restrictions lift more, and people are encouraged to go out, we expect to see that to only continue.”

While all of the Australian rideshare companies refuse to provide exact numbers, one possible quantum was provided by 13cabs, Australia’s largest taxi company, which last month revealed there had been an 80% drop in demand since the shutdown began.

The financial pressure it produced was certainly immense, leading Uber to lay off more than 14% of its global workforce and more than 100 employees from its Australian offices earlier this month.

With numbers falling, some have diversified into delivery services

Meanwhile, Ola, 13cabs and Uber all made the decision to move into delivery services to offset lost revenue.

In this respect, DiDi’s China head office and its Australian arm appear split. While the former introduced a delivery service in March, the latter hasn’t followed its lead although Jordan wouldn’t rule it out.

“It’s certainly something we’ve looked at but we chose to focus on other initiatives. In saying that, we’re constantly looking out for ways to grow the business and help drivers earn,” he said.

Now that restrictions are lifting however, DiDi and others are hoping there’s light at the end of the tunnel for their main market.

While Jordan acknowledges people will “obviously change how they move around” once Australia comes out of COVID-19, he believes rideshare could provide a safer alternative to buses and trains.

Companies for their part will be doing their utmost to convince customers and drivers that the rides are safe. But they may have difficulty convincing some.

Ron, a retiree in his 60s who asked his surname not be published, is one such example. Until the virus outbreak, Ron had been earning between $800 and $1,200 per week driving, but says he’s reluctant to return due to both his age and his wife’s work at a retirement home.

“I would hate to contract COVID-19 [and] give it to my wife who would then take it to a village where all her clients would be in high-risk categories,” he said.

Even with reduced rides out there though, he believes there will still be plenty of Australians who need the work.

“Every time I look at riders app [though] I notice [there’s] still a heap of drivers out there. They must have a lot of patience.”