Uber Struggles as Mexico Slowly Reawakens

Over 18,500 companies throughout Mexico opened on Monday and with them, many informal street food puestos, coffee shops and associated small businesses. Transport systems, both public and private, are reawakening to provide transport for workers, as well.

Among those that are seeing a revival in operations is Uber. The private driver service has seen a 70 percent drop in business in Mexico reports Economía Hoy, while its food delivery arm has more than doubled transactions as its popularity rocketed during the quarantine period most of Mexico is still living in.

The implications of Phase 3, the most dangerous phase of COVID-19’s spread, was disastrous for the drivers that rely on income from the company. According to Economía Hoy, April saw a drop of 80 percent in business, as all but essential services were closed in an attempt to reduce the curve of contagion. Rystad Energy reported a 40 percent drop in road traffic in Mexico City in April, with ONEXPO, an association representing fuel retailers, reporting that sales at the pump had dropped by up to 70 percent nationwide.

But the company’s private driver service is not the only business line having difficulty. Uber’s cost cutting measures that have taken place at a global level resulted in the demise of JUMP, its bike sharing service, in several Latin American cities. According to a company statement, the decision to shutdown JUMP was driven by the desire to ply more investment into the scooter sharing service, Lime. “Uber is merging its JUMP business with Lime. This means that the JUMP operation in Mexico City, as well as in the cities of Sao Paulo, Santos and Santiago, will be discontinued," the company said in a statement.

The company has cut some 3,700 jobs globally in May as the movement on restrictions continued around the world. The layoffs were set to save the company US$1 billion in annual costs, reported NPR.

There is a similar story for the company’s main rival, Lyft. Lyft has likewise witnessed falling demand for its services. The company also cut 1,000 jobs, around 17 percent of its workforce, at its San Francisco offices following plummeting business levels, Mercury News reported.

Mexico City is unlikely to open up further for the next few weeks, given that in the last few days it has witnessed its highest 24-hour rise in deaths since the COVID-19 outbreak began. However, once it does, business should pick up once again for the workers of ride sharing apps.

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