Drivers are struggling with high gas prices, with over half of surveyed RSG drivers saying they’ve cut back on driving because of gas prices or quit entirely. How can drivers beat rising gas prices and inflation – is it even possible? Senior RSG contributor Sergio Avedian shares what you need to know about high gas prices, inflation, and strategies to maximize your earnings.
About two million Uber and Lyft drivers use their cars to earn a decent living. Uber and Lyft run on a “no asset” business model, and they depend on their so-called independent contractors (ICs) to bring the tools of the trade to work, i.e. our cars.
As ICs, we are responsible for all the driver expenses of our vehicles, such as gas, insurance, tires and auto parts for proper maintenance. Since 2019, everything we purchase to drive our cars is up by 50-100%. Gasoline in most parts of California is about to hit $6 a gallon, compared to the $3.50 average for 2019.
Unless you are driving an electric vehicle, a full-time rideshare driver has to buy gas on a daily basis. Auto parts we must buy to maintain our cars are up over 50-70% since 2019, tire prices are up 60-70% since 2019, even a simple oil change is up by 30% since 2019!
- Gas prices are going up, but there are ways to save at the pump (like using gas cashback app online jobs
How Much is Rideshare Costing Drivers?
A quick back-of-the-envelope calculation reveals the damage. In 2019, I bought 10 gallons of gas and spent $35.
I have a car that averages 35 mpg, so I expect to drive 350 miles with that tank of gas. Assume I would gross $250 with that 10 gallons of gas, which is good (about seven times what I spent).
In 2022, I bought the same 10 gallons of gas and spent $55. If my gross earnings stayed the same (highly unlikely due to oversaturation), my income would be reduced by 8%.
This is just gas, folks, and if you add all the other expenses on a spreadsheet, our earnings are down at least 20% since 2019 just due to inflation.
Here’s a suggestion from an RSG reader (below) who says he, along with other drivers, really wants to see a gas surcharge from Uber and Lyft! My response to him? Join the ‘Show me the money’ club!
Have Our Earnings Kept Pace with Inflation?
Have our Lyft and Uber driver earnings kept pace with inflation? Not exactly, as the Uber rate card in Los Angeles before the pandemic in 2019 was 60 cents a mile and 21 cents a minute, and the Lyft rate card was 80 cents a mile and 12 cents a minute.
What are they today? Exactly the same as 2019, while everything we purchase to run our vehicles has gone up by 50-100%!
One would think as true independent contractors (ICs), we would have pricing power like two friends of mine do, a plumber and an air conditioning contractor.
These two true ICs have raised their prices in accordance with the raw materials they use to conduct business. Uber and Lyft’s “freedom and flexibility” rhetoric doesn’t cut it for me, and it never did.
We as rideshare drivers are not ICs for the simple fact that we don’t control what we charge the passenger.
Do the executives at Uber or Lyft even consider paying the drivers at least a fuel surcharge until the prices go back down? Not for a minute, because they don’t own the cars, put gas in them, insure them, maintain them, clean them, etc.
Rideshare companies, for the most part, have found two million people around the country who are willing to drive at any cost. I thought maybe with higher gas prices, fewer people would be out, but that doesn’t seem to be true (screenshots below):
Look at all the people! And this doesn’t include Lyft, which was almost as busy as this Uber map.
With a gallon of gas touching $6 and the same rate card as 2019, why are all these drivers out there? It certainly is not for the incentives, so why are all these drivers fighting each other for crumbs on the Uber and Lyft dinner table? Please, join the Show Me The Money Club (SMTMC), do not turn your engine on for Uber and Lyft unless you get paid what you deserve.
Inflation is Here
I am not one to hold back when Uber or Lyft cut incentives or lower mileage/minute rates. I have written multiple articles about these subjects the past few months, but what I noticed is that besides Uber and Lyft slashing and in some cases totally eliminating driver bonuses (Quests) and Streaks (Consecutive Ride Bonuses), there is another dirty word for Rideshare drivers, it is called INFLATION.
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated for certain goods, such as food, or for services, such as a haircut, for example.
Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.
The only way to ‘beat’ inflation is to increase your earnings. Of course, you can also try to reduce your consumption of everything (gas, expensive food, etc.), but the best way to truly beat inflation is to earn more.
Takeaways for Drivers
The biggest takeaway for drivers? Try something other than rideshare driving for a time! If rideshare is taking you far away and costing you a lot of money in gas, try driving shorter distances with the most popular delivery services.
Other things you can do to reduce your gas costs include:
- Driving for delivery instead! DoorDash and Instacart typically have smaller driving areas, to keep food hot (DoorDash) or cold (Instacart groceries)
- Drive only when Uber and Lyft are offering promotions/incentives
- Consider getting an electric vehicle! We’ve broken out cheaper options at our Best Electric Vehicles for Uber and Lyft Drivers article
Wondering how other drivers are handling rising gas costs? Take a look at our video below: How Some Uber And Lyft Drivers Are Driving Different With Rising Gas Prices
Driving for Uber and Lyft should be treated like our own small business. Run your numbers, and check your profitability. After all, aren’t we all in it for ourselves? This is not government-subsidized public service, we are here to make as much money as possible in the shortest period of time.
How are you handling the increased price of gas as a rideshare driver? Take our survey here and share your thoughts!
-Sergio @ RSG