Uber, Lyft drivers feeling pinch of high gas costs
Gas prices that broke record highs recently are hitting app-based gig drivers' pockets hard.
Contract workers who drive for Uber, Lyft, DoorDash, Instacart and other companies pay for their own gas and use their own cars to transport people and goods, but some are quitting after finding that the gigs’ benefits do not outweigh the costs, drivers and labor experts said.
“Right now, I’m looking for an extra part-time job for the weekends and if I found it, I would stop driving,” said Adem Aydin, 47, a Shoreham resident who drives for Uber.
Of 252 Uber and Lyft drivers across the country who were surveyed, 30% were driving less and 13% had quit because of high gas prices, according to a poll conducted two weeks ago by “The Rideshare Guy,” a blog and podcast that provides information about and for ride-hail drivers.
Gas prices broke record highs several times last month, hitting a peak of $4.47 per gallon of regular gas March 11 on Long Island, though they've fallen some since then.
On Long Island, the average price of a gallon of regular gas Tuesday was $4.19, which was 47% more than the price a year earlier, $2.85, according to AAA.
Some of the companies that hire gig drivers have responded to the rising prices by adding fuel surcharges and other benefits that are paid to drivers.
Last month, two ride-hail companies began assessing temporary fuel surcharges — Uber passengers are charged an additional 45 cents or 55 cents, depending on the locations, and Lyft passengers are charged 55 cents more — on each trip and the fees will be in place for at least 60 days. All of that money will be paid to drivers.
Customers using the Uber app who click for the fare breakdown before scheduling rides will see the extra 45 cents or 55 cents listed for “estimated surcharges.” The Lyft app also lists its surcharge.
Grocery delivery service Instacart added a 40-cent fuel surcharge to each customer order for a month. Restaurant delivery app DoorDash is giving drivers 10% cash back on gas purchases made with a prepaid debit card at least through April.
But gig drivers and their advocates say it’s not enough, especially since the fuel surcharges are based on the trips, not the miles driven, and that the companies are taking too much of the financial pie.
“If they raise our … [per-mile] and per-minute fare, we may be able to breathe a little. But as it stands now, a lot of drivers have [chosen] to stop driving because it’s not feasible or beneficial for them anymore,” said Brooklyn resident Jacquelyn Wideman, who co-founded the Long Island Uber and Lyft Network in 2017 and drives for both ride-hail companies on Long Island.
The network is one of nine groups in a coalition, Justice for App Workers, which led a caravan of ride-hail drivers and delivery workers from Brooklyn to Uber’s offices in Manhattan last week to call for companies to decrease their commissions on drivers’ trips and provide fair pay.
Asked about the coalition’s demands, Uber cited its new fuel surcharge paid to drivers outside New York City and its pay rate increase for city drivers that was mandated by the New York City Taxi and Limousine Commission.
“Uber increased its rate for drivers 5.3% at the start of March, bringing the minimum wage up to $31.74 [per hour online for the average driver] in New York City and helping with increasing fuel prices. This is part of an annual raise tied to the rate of inflation. … In contrast, New York City taxi workers haven’t had a raise on the meter in 10 years,” Uber Technologies Inc., based in San Francisco, said in a statement.
Uber is the largest ride-hail company in the country, where it accounts for 70% of the market share, according to Bloomberg Second Measure, a Manhattan-based consumer data analytics company.
'$30 after nine hours'
Aydin, who works full-time as an electronics engineer, has been driving for Uber on the weekends for about four years.
The married father of two sons, 1 and 7, picked up the part-time gig to help support his family, he said.
On a recent Friday, he made $113 driving for Uber but he paid $50 for gas and will pay an estimated $20 in income tax, he said.
“I came back to home with $30 after nine hours,” said Aydin, who said the part-time gig isn’t worth the effort or cost now.
Lyft said its drivers were spending, on average, 75 cents more on gas per hour in early March compared with a year earlier.
In addition to Lyft’s 55-cent fuel surcharge, which is not in place for New York City drivers, , the company has boosted its cash back program to give drivers 4% to 5% back on gas purchases through June 30.
Also, in January, Lyft partnered with GetUpside, a cash back app that gives drivers back up to 32 cents per gallon.
Nationwide, Lyft drivers are earning more per hour on average than they were a year ago, the company said.
But part of that increase is due to more customers requesting rides after the decline amid the COVID-19 pandemic, a spokesman for San Francisco-based Lyft Inc. said.
How many drivers?
Justice for App Workers said it represents 100,000 ride-hail drivers and delivery workers in the New York metro area, but it is unclear how many gig drivers there are in New York State or how many might have left the work in the past year.
The companies the drivers work for won’t disclose their driver numbers.
Data from the New York State Department of Motor Vehicles also is unclear.
Uber and Lyft are classified as transportation network companies, or TNCs, which the state approved to operate on Long Island and upstate in 2017.
State law requires TNCs to enroll all their drivers in the DMV's License Event Notification System, or LENS, which tracks license events like traffic ticket convictions, suspensions, revocations and reinstatements.
Uber has about 94,000 people in the LENS system and Lyft has about 29,600, DMV spokesman Tim O'Brien said.
But those numbers do not specify if enrollees are still driving since first being entered into LENS, or whether they are contract drivers or corporate employees, he said. Also, some may be working for more than one TNC and could be in the system more than once, O'Brien said.
In New York State, passengers of black car and limo companies and TNCs pay a 3% surcharge for each ride. The companies are required by law to remit those payments monthly to The Black Car Fund, a nonprofit created by the State Legislature to provide workers’ compensation insurance to for-hire drivers.
The Black Car Fund estimates it covers more than 100,000 for-hire drivers statewide but the nonprofit does not know how many Uber and Lyft drivers are among them, spokesman Lionel Morales said.
Prices break records
Uncertainty caused by Russia’s Feb. 24 invasion of Ukraine exacerbated the issue of rising gas prices. They had been increasing for months prior, driven largely by tight supplies and increased consumer demand amid the economic recovery from the COVID-19 pandemic.
Gas prices broke record highs several days in March.
Here is how the prices stack up nationally and on Long Island.
U.S. Average Price Per Gallon
Previous record before March: $4.11 on July 17, 2008
Current record: $4.33 on March 11
Price Tuesday: $4.18
Price a year earlier: $2.87
Long Island Average Price Per Gallon
Previous record before March: $4.35 on July 8, 2008
Current record: $4.47 on March 11
Price Tuesday: $4.19
Price a year earlier: $2.85