The past year has brought tremendous change to the gig economy landscape. Lyft got a new CEO, Uber reached profitability, DoorDash proved itself a consumer staple, and Instacart finally went public.
Investors entered this year worried that U.S. consumer spending would fall dramatically, adding stress to pandemic economies that had posted several quarters of growth thanks to stay-at-home orders and stimulus checks.
Harry Campbell, founder of the Rideshare Guy
“After a tumultuous few years during the pandemic, Uber’s driver supply is at an all-time high. This oversupply means lower earnings can be expected next year as drivers compete for the same number of trips. Combine this with Uber’s recent profitability push, and it won’t be surprising if Uber continues to pay drivers less and charge passengers more to increase profitability.
“On the regulatory side, there are a number of state ballot initiatives and proposals that will be costly and time-consuming. But gig companies like Uber, Lyft, and DoorDash will ultimately come out on top, and we’ll see some additional benefits like ‘guaranteed hourly earnings,’ which we saw in California as part of Proposition 22.” I expect him to maintain independent contractor status under state law while giving up benefits.
“Consumer demand for food delivery has continued to grow, but I wouldn’t be surprised if growth stalls in 2024. There are some mixed economic signals, and if consumers are to cut back on spending, I think there will be cuts. Spending on food delivery will come well before cuts to ride-sharing. The former is a lot of good.” “There are alternatives: cooking at home, packing your food, going out for dinner, eating leftovers, etc. Consumer demand in the food delivery space is a good leading indicator that I will be watching carefully in 2024, and may have larger impacts on spending and demand in the rest of the gig economy.”
Dan Ives, senior equity research analyst, Wedbush
“We believe the gig economy is now thriving, led by Uber, as the economy and business model scale significantly. We believe more e-commerce will be combined with the gig economy as we envision purchasing retail products that can be picked up by Uber or Lyft and delivered to the customer within a few hours. We see more revenue being generated in the gig economy, and we also believe more driverless Uber and Lyft in select cities will be pilot projects launched in late 2024, following the very successful Vegas test case. “We see this as a golden age for the gig economy in 2024, with food distribution stabilizing post-pandemic and travel increasing, with many people returning to the office full-time next year.”
Greg Star, co-founder, Carvertise
“The days of ridesharing companies being VC-funded are over. There is an increase in both profitability and revenue growth. As a result, you will see higher prices, especially during times of volatility. Fees will remain the same. There is so much competition for rideshare workers that [if there is] any reduction in wages, workers can go to another rideshare company. Finally, [we will see] more and more ads from gig economy companies (including OOH, toppings, car wraps, car interiors, etc.). “Every way to generate more revenue will be tried.”
Pedro Santiago, YouTuber and rideshare driver
“As more states and cities begin to implement legislation for gig workers, the cost for consumers will continue to increase. “The majority of drivers in 2024 will not be affected immediately, but automation, regulation and the trend of more workforce coming into the gig economy will make this challenging in the long term.”
Jamie Siminoff, “chief doorman,” Door.com
“At this point, I find the term gig workers derogatory. This is too broad a term and does not respect the workers who wake up every day focused on doing their best work. We call them ‘Honest Day Workers’ and believe that over the next few years technology will be developed not only to use them but to support them. “We hope to be the catalyst for this change and look forward to a world where the people who do the work protect the economy and are recognized for their work.”
Michael Morton, senior research analyst, MoffettNathanson
“Profitability and viable unit economics are now the focus. As a result, there may be a slowdown or some decline in growth in e-commerce.ees, advertising expense, consumer promotions, and driver incentives as companies focus on rational growth.
“In North America rideshare, we expect rapidly rising variable insurance costs to pressure unit economics, forcing companies to push through the cost increase through a) continued higher consumer prices, or b) higher take rates. “As a result, expect a continued push from Uber and Lyft toward higher-priced products (e.g., Reserve/Scheduled Ride and Extra Comfort) to offset this cost increase, although we ultimately believe base fares will continue to rise for the industry.”
Driver Eddie, YouTuber and rideshare driver
“On the consumer end, I consistently hear riders complaining about the prices going up, but they still order it because there is no other option, and at this point it is a part of their life now. Many people say they forego tipping as a result of the prices, feeling bad they can’t tip their driver but not wanting to spend more money.
“Since inflation hits lower and middle classes the hardest (aka the people who drive for Uber) there is a tremendous influx of drivers, which means the corporations can pay their drivers less. Sure, the quality of car/driver is decreasing, but at the end of the day, people don’t care about that. They just want a ride.
“Long story short, drivers’ wages will continue to go down until drivers realize that accepting every ride that is offered to them will hurt their bottom line. That said, on busy days like New Year’s or July 4, the influx of riders will still mean there are great days to drive and make some money.”