Recent earning reports from companies like Lyft, Uber, and Airbnb show that the coronavirus pandemic is devastating the gig economy, The New York Times reports. And, with massive layoffs hitting all three companies, it could take a very long time for the industry to recover.
“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived,” Airbnb chief executive Brian Chesky wrote in a memo to employees, as quoted by the Times.
Lyft saw a drop in ridership of almost 80 percent in late March. Uber’s losses grew by 190 percent as the company laid off 3,700 workers.
Faced with a threat to their health, Americans are likely to use ride-sharing services far less in the future, studies by CarGurus and the IBM Institute for Business Value suggest.
The pandemic also hit delivery services and bike or scooter sharing companies hard as well. Uber Eats had to shut in several entire countries.
Now, the gig economy will need to adapt to a new dawn.
Airbnb, for instance, will have to find ways to maintain properties to keep customers and real estate owners safe. Many rideshare businesses, including Lyft, are now requiring drivers and riders to wear face masks.
Investors, however, seem undeterred — at least to a degree. Lyft’s stock was up 20 percent on Thursday, after the company laid off nearly 1,000 people and showed better than expected revenues in the first quarter of 2020, according to the Times.