Rising Gas Prices Hit Rideshare and Delivery Drivers Especially Hard

March 16, 2022 Topic: Gas Prices Region: United States Blog Brand: Politics Tags: UberLyftRising Gas PricesGig EconomyInflation

Rising Gas Prices Hit Rideshare and Delivery Drivers Especially Hard

Uber and Lyft both announced new fuel surcharges to offset the rising gas costs for their drivers.

 

The average cost of a gallon of regular fuel reaching $4.32 on Tuesday. That has made it difficult for delivery and rideshare workers to make a living.

In just one week, gas prices have risen about fifteen cents. This time a year ago, gas prices hovered around $2.85 per gallon.

 

“We, especially right now, are seeing a lot of pain at the pump for a lot of these gig workers who are doing food deliveries or who are doing grocery shopping or who are doing driving,” UNC-Chapel Hill Assistant Professor Alexandrea Ravenelle said to Yahoo Finance Live.

She added that the usual profits for food delivery and rideshare drivers are quickly eroding due to rising gas prices.

“Drivers were already being left with a tiny fraction of the fares. It’s not unusual for 30 percent, 40 percent, even 50 percent of the cost of a ride to go to the company,” Ravenelle said. “You know, most of us feel pain at the pump maybe once or twice a week when we fill up our tanks. But for rideshare drivers and for delivery workers, that pain pump might happen daily or even several times a day.”

Some drivers are already making changes to save on fuel costs.

“I’ve spoken to drivers that have actually found it’s cheaper, even before this big increase, to rent a Tesla for rideshare, rather than pay for gas,” Ravenelle said.

Surcharges Given Go-Ahead

In response to surging gas prices nationwide, popular ridesharing companies Uber and Lyft are adding temporary fuel surcharges.

Lyft said all of the money from the surcharges will go directly to its drivers.

“We’ve been closely monitoring rising gas prices and their impact on our driver community,” a company spokesperson said, according to National Public Radio.

Meanwhile, Uber has announced that it would add a surcharge on Uber trips and Uber Eats orders for the next two months.

“We know that prices have been going up across the economy, so we’ve done our best to help drivers and couriers without placing too much additional burden on consumers,” Uber said in a statement, adding that its drivers will receive 100 percent of the surcharges.

Gig Economy the Future?

Despite the rising overhead costs, participation in the gig economy is continuing to grow.

Amid the ongoing pandemic, a Pew Research study published in December found that 9 percent of U.S. adults participated or are currently participating in the gig economy. Moreover, a third of them are using gig work as their main source of income.

According to Yahoo Finance, previous Bureau of Labor Statistics surveys have estimated that there are approximately 57 million gig and freelance workers nationwide.

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.