I'm not sure how that's a big deal for Lyft. It seems like a pretty healthy supply and demand curve -- if the number of drivers drops, it becomes more profitable to be a driver. And there's always people looking for supplemental work, who'll go where the money is.
I suppose the part I'm missing is the reduction in riders if there's not enough drivers, but that is apparently not a huge issue (according to their rider-retention numbers).
Maybe. The churn for Uber is reportedly 96% annually[1]. The Uber booth at the mall is for recruiting drivers, not riders. Ads on the radio are for drivers.
And if you look around at what they spend all of this money on, it's incentives and marketing towards drivers (as well as insurance). That's a lot of churn given the loss they're taking on these expenses towards drivers.
Re: your other point about demand. A piece of anecdata that weighs on my mind is, 10 years ago, there was some extreme economic disincentive for a cabbie to come to my residential neighborhood. Uber's black car service was a godsend, even though it cost twice the price of a cab. The supply/demand curve made sense, since I was paying more for my sparse neighborhood.
Now I get 10x quicker service for half of the cab cost and a quarter or less of the black car cost. Wat.
What I want to know is whether this is because there's a supply of 96% of yearly suckers who come to my neighborhood without doing the math like cabbies in 2009? Or is it just that Uber/Lyft is dumping incentives on them? Because my neighborhood hasn't become more dense, and the math got far worse for the driver.
I keep wondering what a reversion to this norm means for Uber and Lyft. If drivers have a lot more pricing power through churn, is 2009-cab-refuses-to-come what it looks like? If you can't get a car due to supply constraints, somehow would that be good for these companies?
Anyway, it seems like Uber/Lyft pour most of their money into making drivers happy, and yet they fail to keep them on "the platform". I don't know the full ramifications of it, but it seems like a major issue.
Do you disagree?