New ride hailing apps trying to create competitive advantage over Uber by offering more benefits to drivers

22 Aug 2022 , 09:55 AM

With the promise of treating drivers better than Uber and Lyft, a number of new ride-hailing apps are competing.

One of them is Dallas-based Alto, which employs drivers as employees and pays them annually. 100% of the cab fares are given to the driver by Austin, Texas-based Wridz and McLean, Virginia-based Empower. A portion of the income is guaranteed by the New York City Drivers’ Cooperative.

Longtime complaints from Uber Technologies, Inc. and Lyft, Inc. drivers range from platform fees to employment status. As quarantines slashed the demand for rides, many drivers resigned their jobs since the cost of unemployment benefits was more than their driving income. Others switched to food and grocery delivery, while others looked for full-time employment. The internet firms had to provide millions in bonuses to entice drivers back because of this change in the balance of power between them and the applications.

The newest businesses can capitalize on this unhappiness. But in order to gain market share, they must compete with the speed and scale with which Uber and Lyft connect passengers with drivers. The impetus to compete has increased as the incumbents have reported success in attracting and keeping drivers.