Nearly half of Uber and Lyft drivers in the U.S. have quit or are driving less due to high gas prices caused by Russia’s war in Ukraine, despite temporary fuel surcharges added to fares by those ride-hailing companies, according to a survey shared with TechCrunch.
“Forty-three percent of Uber and Lyft drivers still say they’re driving less or have quit completely despite the new fuel surcharges,” Harry Campbell, founder and CEO of The Rideshare Guy (RSG), a blog and podcast dedicated to helping rideshare drivers earn more money and stay on top of industry news, told TechCrunch. “This compares to 53% of drivers who said the same before the fuel surcharges were announced.”
The Rideshare Guy originally polled drivers on how they felt about the rising gas prices, collecting 325 responses from Uber and Lyft drivers between March 7 and March 11 via email and social media. When the surcharges were announced in mid-March — a fee of $0.45 to $0.55 per ride for Uber customers, and $0.55 for Lyft customers, to go directly to the drivers — RSG sent out another poll between March 22 and March 24, this time collecting 252 responses.
“Many drivers say that the fuel surcharges are not enough and they would have preferred to see a per-mile surcharge to account for the increased fuel expenditure on long trips instead of a flat fee,” said Campbell.
A Lyft driver in Orlando, Florida told TechCrunch the $0.55 per trip surcharge is “an insult to the drivers.”
It’s hard to calculate the average rides per driver per day, but to put the fuel surcharges in perspective, if a driver averages 15 fares per day, they will get an additional $8.25 per day at the $0.55 surcharge rate. The average price of gas in the U.S. is $4.246, as of Monday, according to data from the American Automobile Association. A year ago, the average was $2.859.
Both Uber and Lyft saw a year-over-year increase in revenue from 2020 to 2021, which both have said is in part thanks to increased trips to airports as post-pandemic travel increases. Airport trips are good drivers of revenue growth because they’re typically longer and therefore cost more; however, it’s exactly trips like these that drivers say require more than a standard $0.55 surcharge.
Driver Angela Ryan, who shared with RSG that she stopped driving entirely due to the high gas prices, suggests Uber and Lyft implement a fluctuating surcharge, one that’s smaller for shorter trips and larger for longer rides or ones that are more labor- and gas-intensive. For example, an additional surcharge for rides where drivers have to carry luggage, groceries or anything else that adds weight to a car, or rides that require driving up hilly or mountainous neighborhoods, which would expend more gas.
“We really should be compensated more with rising prices of gas and the lack of tips because the riders have no idea of all the extra fees which come out of our bottom line too,” said Ryan. “I will not be driving until better help is offered, or prices go down. It is just not an income, it is a negative right now.”
While Uber and Lyft have diversified their revenue streams, with Uber increasingly focusing on freight and delivery, and Lyft successfully implementing bikeshare programs across the country, both companies mainly attribute their respective year-over-year revenue growths to ride-hailing, which means retaining drivers has to be a top priority.
This is something Uber understands, although it has cost the company in the past. Last April, Uber launched a $250 million stimulus package to incentivize drivers back onto the app after the pandemic saw drivers leaving in droves.
When Lyft reported its 2021 earnings in early February, CEO Logan Green said the company had sustained driver recovery in the fourth quarter, with active drivers hitting a new pandemic high that the company expected to maintain despite the Omicron variant. That was obviously before the gas prices shot up, although Lyft told TechCrunch it hasn’t seen a decline in the number of drivers on the platform or the hours they drive in March when compared to January. Uber did not respond in time for publication.
The survey results show that the surcharges have brought some drivers back, at least. Before the surcharges, 36% of drivers said they were driving the same amount, whereas after the surcharges, that number jumped to 43%. After the surcharges, 30% and 13% said they were driving less or quit because of gas prices, respectively, compared to 38% and 15% before.
“We see that Uber drivers were slightly happier overall with the surcharges compared to Lyft drivers, which is interesting because the surcharges were comparable and Lyft also added additional cash-back opportunities on gas purchases for those drivers using the Lyft debit card,” said Campbell, referring to Lyft’s initiative to give U.S. drivers with a Lyft Direct debit card an increased 4% to 5% cash back on gas through June 30.
However, generally, drivers don’t appear to be happy with the surcharge. The survey found 39% of Uber drivers and 42% of Lyft drivers said they were not satisfied with the fuel surcharge. Only 28% of drivers were satisfied with the Uber fuel surcharge, and 21% were satisfied with Lyft’s. About a third of Uber and Lyft drivers responded noncommittally to the question.
“Many drivers asked what took so long — why did Uber (and then Lyft) delay their announcements and then delay implementation when this problem had been fomenting for several weeks?” said Campbell. “Others said the additional fuel surcharge doesn’t do enough to make a difference — some cited inflation rising faster than what this fuel surcharge covers, others stated it doesn’t cover the increase in gas in their cities.”
Christopher Patrick said he hadn’t changed his driving habits but doesn’t expect fuel prices to come down. While he believes Uber and Lyft should have added this surcharge two weeks sooner, he says it’s a step toward acknowledging the increasing cost of doing business for drivers.
“Reducing [Uber/Lyft’s] take as the TNC or increasing the per-mile/time compensation are longer-term requirements to maintain the available drivers in these high inflation times,” said Patrick.
source https://techcrunch.com/2022/03/29/uber-and-lyft-drivers-say-fuel-surcharge-is-an-insult-to-drivers/
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