Uber and Lyft have made it a point to do more to support their drivers. As Harry Campbell, an industry analyst known as the Rideshare Guy, told Curbed, pay and retention are key issues for both of these billion-dollar ridehailing giants, who have been promoting new apps and investments in community driver hubs in efforts to make the lives of independent contractors easier and more profitable.
With summer driving season coming up, hundreds of drivers from across the company have a suggestion: Help them pay for rising gas prices. A petition on Coworker.org started by driver Holly Rubino asks both companies to help drivers pay for rising gas costs (“gas prices are driving us out of the rideshare industry”). More than 500 have signed the petition thus far.
With gas prices expected to rise 14 percent this summer, according to U.S. government forecasts, it’s not a trivial concern for drivers worried about their take-home pay.
As both companies grow and provide a larger share of rides and trips in cities, their ability to retain workers and expand is important. While a large portion of their workforces are part-time or flex-time—of the roughly 900,000 people who drive for Uber in the U.S., nearly 60 percent work for less than 10 hours a week—those who work longer hours really feel the impact of rising gas prices on take-home pay.
“Pay is a big factor,” Campbell told Curbed. “A lot of drivers come in with the expectation that they’re going to make good money. Look at the marketing campaigns they’re running, when they talk about ‘the ultimate side hustle.’ When you measure messaging and expectations— remember that the average driver is making between $16 and $18 a hour before taxes, close to minimum wage—it hurts retention.”
Tom Seymour, a 70-year-old Uber and Lyft driver from Clarkston, Michigan, who works on and off for the ridehailing companies in nearby Detroit and Ann Arbor, signed the petition because he feels the companies need to do more to address “the main issue,” the financial motivation to drive.
After keeping detailed logs of his work, the retired COO found that he was making around $5 or $6 an hour, despite being a long-time driver with a lower commission rate (20 percent) grandfathered in.
“For the person who needs to pay a bill and make some cash, you can do OK working on the weekends,” he says. “I’m a businessman. I was interested in the return on investment. They’re not paying me an adequate amount of money. I have no incentive to drive, from a financial standpoint, I do it because I enjoy the people I meet. I like the extra cash.”
Uber and Lyft have made some efforts to address rising gas prices, or at least help drivers cover the fuel costs. Uber set up an Uber Visa Debit Card for its drivers, which offers 3 percent cash back on gas at Exxon-Mobil stations and 1.5 percent cash back at all other gas stations. Lyft just announced that it will increase its Shell fuel rewards program during the summer on a sliding scale, from 10 to 50 cents a gallon depending on the activity level of the driver.
According to Seymour, he finds better deals for gas at Costco.
The company has made significant changes to both its app and pay program; riders can tip, drivers can earn extra for long pickups, and make additional money for their POOL pickup fares, the company’s shared ride option. And, in many high-priced markets, such as San Francisco, Los Angeles, and Washington, D.C.—which, especially on the West Coast, have higher fuel prices—the company recently increased per-minute, per-mile rates by 5 to 10 percent.
But many drivers who signed the petition feel like they’re still being squeezed by fuel costs. Margo Stratton, 44, who lives in District Heights, Maryland, near D.C., and just celebrated her two-year anniversary with Uber, says she’s felt the pinch from rising gas prices. Filing her tank used to cost $30, and now it’s $51, which eats into the earning potential of her second job as a ridehailing driver.
She’s found that recent changes to the pay structure, including bonuses for completing a certain number of weekend trips, has helped her make more money, but she’s spending more of that on fuel.
“I am hoping that Uber sees that drivers need a separate benefit,” she says. “I would hope they create a different benefit for when gas prices spike. It always goes up in the warmer months. I keep my AC on so my passengers are cool and feel comfortable. If gas went up another dollar a gallon, I’d probably be paying closer to $80 to fill my tank up. Then, it’s not as much of a benefit to drive for Uber.”
Stratton enjoys being an Uber driver, and has supported many of the company’s recent changes. But she’s also focused on the bottom line.
“If gas goes up, less drivers are going to drive,” she says. “If you don’t have drivers out there, you’re not going to make any money.”