Uber is going to cut 3,700 full-time employees, or about 14% of the workforce, because people who fear a coronavirus infection stay indoors or try to limit contact with others to minimize the risk when they go out.
Rival Lyft and the Airbnb home sharing service have also cut jobs due to declining usage.
In a world where the pandemic has made social distance a new way of life, companies are struggling with business models that are now grappling with people’s willingness to share their personal space.
The layoffs and related costs such as layoff cost approximately $ 20 million (£ 16 million) for Uber, which had already imposed a lease freeze.
The San Francisco-based company has provided financial assistance for up to 14 days to drivers and delivery workers who have been diagnosed or quarantined Covid-19.
Those ridden drivers who are still on the road are trying to prevent infections and put together enough rates to put dinner on the table, even if the drivership plummets.
“Many of our lives are on the verge of homelessness,” says Jerome Gage, 28, who drives for Uber’s rival Lyft in Los Angeles. “We have to work or we don’t eat.”
Mr. Gage, who has not paid sick leave or health insurance as a contract worker, has seen his income fall as the number of journeys he made decreased by about 75%.
“You can catch the virus on any trip,” said Mr. Gage. “So every day we are on the road, we are in danger.”
Lyft announced last month that it would fire 982 people, or 17% of its workforce, due to declining passenger numbers.
The San Francisco company expects to spend $ 28 million (£ 22 million) to $ 36 million (£ 29 million) on expenses related to employee layoffs and benefits.
Airbnb is broaching staff because the thought of opening living spaces to strangers is starting to feel like an anachronism.
On Tuesday, the company announced it would cut a quarter of its workforce, about 1,900 people. The San Francisco-based company expects sales to fall by more than half this year.