Companies such as Uber, AirBnB, and Grubhub have not been handling COVID as well as people think.
In 2020, the Gig-Economy is well known as a more efficient and cost effective option to the traditional hiring process, with nearly 56 million Americans making up the free-lancing workforce. So how has this part of the economy been holding up during the pandemic? For the most part, very well, however companies such as AirBnB, Uber, and Grubhub have been having a tough time. Uber, for instance, saw a 80% decrease in ride- share revenue during the peak of COVID-19 as commuting drastically slowed down.
AirBnB saw an even worse hit to their business due to the same problem, as well as mandatory safety regulations that many AirBnB hosts are having trouble accommodating. Similar to these gig companies in the travel space, food delivery services such as Postmates, Grubhub, and Doordash have been facing problems, especially from major U.S. cities. Despite increased popularity in these services, cities such as New York, Chicago, and L.A. have implemented new law that limits the commission that these companies can charge restaurants. This legislation was implemented to help smaller businesses, who claim to have been overcharged for these delivery companies services, citing fees as high as 40%.
While these companies are struggling for now and will continue to face challenges due to the pandemic, their popularity and financials make them almost certain to survive.