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As the new coronavirus locks down cities across the world, Uber (UBER) and Lyft (LYFT) drivers face the possibility of financial ruin as more people remain in their homes to rein in the illness.
According to an Edison Trends study released Wednesday, Uber and Lyft rider spending in the two weeks prior to March 15 collapsed by more than 20% in California, and a whopping 40% in Washington State, two of the early hotspots in the U.S. coronavirus outbreak. In the week prior to March 15, Uber ridership in Manhattan alone fell by more than 24%. And those numbers are unlikely to recover anytime soon.
"It is a financial crisis for a lot of people," says New York-based Uber driver Isjad C., who along with other drivers, didn't want his full name used out of fear of repercussions from Uber or Lyft.
Six Uber and Lyft drivers Yahoo Finance spoke with in New York and California said they've seen a steep drop-off in the number of passengers looking for rides. With earnings so low, they barely cover fuel costs.
"A lot of Uber drivers I meet, they are pretty much, you know, hopeless and scared that they are going to run out of business really soon," Isjad C. said.
William J., a driver out of the Los Angeles area, said he's seen fewer riders, as well. The decrease has been so dramatic that he was unsure how long he could continue to as an Uber driver. The sharp increase in people working from home is easy to see on the roads, he explained. The heavy traffic volume on the highways around L.A., he said, has cut what is normally a two-hour ride to just 40 minutes.
With fewer users seeking rides, some drivers are moving to Uber Eats, or other delivery services to make up for the lost pay, according to at least one driver who spoke to Yahoo Finance. But two drivers said that the pay can't compare to a standard Uber drive.
According to JPMorgan (JPM) analyst Ronald Josey, Uber said on a recent conference call that it has seen a 10-fold increase in restaurants signing up for Uber Eats since last Thursday.
Outside of the slowdown in ridership, drivers also have to contend with their personal safety, as they continue to ferry passengers who might have the virus themselves. At least one driver told Yahoo Finance he's concerned he'll catch the virus from the passengers he picks up while on the road, but can't afford to turn down rides.
Further impacting drivers is the fact that both Uber and Lyft, on March 17, announced they have suspended their carpooling options in both the U.S. and Canada for the foreseeable future.