The novel coronavirus has sparked stay-at-home orders in dozens of states nationwide especially in major metropolitan areas. Like auto retail dealerships, the shutdown has had a devastating effect on alternative modes of transportation like ride sharing and car sharing.
It’s a difficult time to operate a consumer-based service centered around sharing contact points with others who could potentially be sick. Commodities like face masks, hand sanitizer, and bathroom tissue are in short supply, an indicator of customer sentiment around shared surfaces.
How are mobility services in the US faring during the downturn?
GM’s Maven Shutting Down
The car sharing service launched by General Motors in 2016 has announced the will cease operations by the end of summer 2020. Maven suspended operations in March due to COVID-19 less than a year after pulling out of eight cities in 2019.
Maven was implemented by GM as a direct competitor for Car2Go and Turo but did not achieve the same level of success. Staying in the game was deemed to not be feasible and the plug was pulled on April 21st. Maven customers received a communication stating, “After critically looking at our business, the industry, and what’s going on with COVID-19, we have made the tough but necessary decision to wind down our business.”
Without a doubt, Uber is getting hit hard by the coronavirus outbreak, especially in areas most affected by the virus. In cities like Seattle, their ride sharing volume has declined by around 70 percent. Between customers having nowhere to go and the fear that drivers or vehicles may get them infected, Uber customers are choosing not to use Uber’s ride sharing service.
Investors are taking notice as well. Stock prices are currently sitting around the $28 mark, down from over $40 per share in February 2020 and well below the peak of $46.38 per share in June 2019.
Rather than accepting the business downturn as it is, Uber has taken an approach to improve their communities. In addition to Uber Eats services becoming more in demand, Uber is also considering the potential to deliver medications and essential items, among other things.
JMP Securities has issued a projection that Lyft’s revenue may fall in Q2 2020 by as much as 61 percent. That’s a tough pill to swallow for the ridesharing company that has yet to turn an annual profit for shareholders. Just more than a year since Lyft’s shares peaked at over $78, they hover around $30 in mid-April 2020.
However, Lyft has shifted their focus from delivering people to bringing goods to customers who need them. On April 15th, Lyft launched Essential Deliveries “ where government agencies, local non-profits, businesses and healthcare organizations can request on-demand delivery of meals, groceries, life-sustaining medical supplies, hygiene products and home necessities — all delivered by Lyft drivers,” according to their blog. It becomes a way that Lyft drivers can continue to earn income in a time when the average consumer is staying indoors.
Lyft also developed LyftUp, a service implemented in March, to provide free rides to those who need essential transportation, for essential workers, and to deliver critical supplies to vulnerable communities.
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