According to AAA, the national gas price average is over $1 more expensive than this time last year. NPR reports that gas prices have increased more than 50 cents per gallon in the first three months of 2021. All of this has led to drivers and couriers asking: how can drivers of rideshare and other top delivery services save money at the pump? Senior RSG contributor Paula Gibbins tackles questions surrounding rising gas prices and what drivers can do about it below.
When gas prices rise, drivers and couriers are faced with a dilemma: drive more to make up for the cost of gas or drive less to waste less money on filling up at higher prices.
The answer depends on a lot of factors, and not just the cost of gas. Some drivers might have high bonuses available making the extra cost negligible. In other markets, it could be the low pay and the overall cost to drive was already difficult to justify, and higher gas prices make it almost impossible.
Some who do this as a side gig have the luxury of “waiting it out” when prices are too high. Others have hybrid or electric vehicles, helping to offset the added fuel expense. But what about your average courier and driver?
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Gas Price Fluctuations
Gas prices always go up and down—that’s just a fact of life. But here’s a chart of what gas prices were like back at the end of 2019 up until now in the first few months of 2021.
We all know the huge dip from March 2020 through May 2020 is due to the coronavirus and several shelter-in-place and stay-at-home orders around the country. No one was traveling, so gas was cheaper than we’d seen it in a very long time. Keep in mind, this chart shows the US average, not one city or state in particular which varies dramatically across the country.
Now, as things are “getting back to normal” we’re seeing an increase once more. But maybe it’s not as dramatic as people may think. Yes, a year ago prices were much cheaper (we were also still in the midst of a pandemic!) These prices also don’t compare to the historic highs of 2008, when the average price of gas was $4.11 (unleaded.)
The real question is, will gas prices continue to rise or will they start to plateau?
If they continue to rise, then drivers will have to take a hard look at their expenses and ways to save money while driving – and at the pump.
Impact on Expenses
For argument’s sake, let’s look at the difference in gas prices, one of the most common driver expenses, for the last three months. We’ll start with Jan. 5, 2021, where the gas prices averaged right around $2.25 compared with June 4, 2021, where gas prices are averaging $3.04. That is a 79 cent increase, which is significant in the long run.
If you drive a car that gets 25 mpg and you drive 250 miles per day, that would mean on an average day you use up 10 gallons of gas, or 60 per week, assuming a 6-day work week. If gas prices increased 79 cents per gallon, you’ll be spending $47.40 more per week now than you did in January—or about $190 more per month.
For the average driver, that is a significant increase and could affect their ability to pay the bills and even fill up one last time that month to make it into the next one.
How Can Drivers Offset Rising Gas Prices?
Unless you have an electric car that uses absolutely no gas, you’re going to have to pay for gas to get around, no matter what the cost. However, there are a few tips and tricks you can try to help offset increased gas prices.
Use a gas credit card and/or gas cash back app
Check our article of the best gas credit cards for rideshare drivers to learn what the best options are. We compared a few of the gas credit cards on the market to see which ones are best for people who want to save and earn cash back on gas purchases.
One of our favorites? The Chase Ink Cash, which allows you to redeem points for cash back, earns you 2% back on fuel purchases, and has no annual fee.
Another great way to earn cash back on all of your gas purchases is to use an app like GetUpside. All you have to do is download the GetUpside app and then immediately start saving money on something you’re going to do anyways – buying gas! The GetUpside app makes sure that you never pay full price for gas again.
And another great app is Fetch Rewards. Fetch Rewards is one of the most popular cashback apps of all time. This app allows users to earn cash back on ANYTHING from ANY STORE. And yes, this includes gas stations. All you have to do is upload your gas receipt into the Fetch Rewards app and you’ll earn points which you can redeem for gift cards. Click here to read our full Fetch Rewards review.
To go along with this is shopping around for the best gas prices. With technology where it is today, you don’t need to just know where the cheapest station is near you from the power of observation while driving around. You can utilize some of our favorite and best gas apps, like GetUpside and Gas Buddy to help you figure out the closest gas station to you with the cheapest gas prices.
In my GetUpside app, I can see that Speedway has the lowest gas price up front, but if I go to BP, I’ll get a higher cash back price that lowers the overall cost of gas to be cheaper than any other nearby option.
Do one extra ride or delivery per day
If you already structure your day around doing a set number of rides or earning a certain dollar amount, try going one past your current goal. An example of a goal would be to give 15 rides and net $150.
If the price of gas increases, increase your goal by one (give 16 rides and net $160). The extra gas used for one more ride or delivery will likely not prove significant, but you should earn enough to help offset that extra increase in the cost of your fill-up.
Upgrade your car
Ok, I know it’s not feasible to get a new car just because the price of gas increases, but the next time you’re in search of a vehicle, keep the cost of gas and other car-related expenses in mind.
Check out hybrids and electric vehicle options available to you. Both Uber and Lyft are pushing to go all electric by 2030, so you might be able to score incentives from them the next time you’re purchasing a vehicle.
Here we go over the best electric and hybrid options out there that we’d recommend for rideshare and delivery drivers, especially if you don’t want to spend more than necessary. In our write up, the Chevy Bolt was among the cheapest and best options, although the Ford CMax clearly stood out as one of the very cheapest options in our Best EVs for Uber and Lyft Drivers article.
If you’re not looking into hybrids or electric options, at least consider something that will get you better mileage. If you go from something that gets you 20 mpg up to a 40 mpg option, you’re saving on gas instantly with that simple upgrade.
Consider delivering instead of rideshare
Overall, most food delivery platforms tend to keep you closer to home than rideshare does. When driving for Uber or Lyft, you could literally get a ride that will take you 2+ hours away from home and have you running all over the place in loop-de-loops.
In addition, some companies like Instacart and DoorDash will offer batched shopping/delivering opportunities. While it’s not always the best user experience for customers, it can definitely cut down on how much you, as the courier, will needlessly drive around.
You can find some of our top recommended food delivery services to work for here.
Or even with delivering packages for Amazon, you’ll be given a route to drive as opposed to heading in 20 different directions throughout your day.
Should Uber and Lyft Pay Drivers More Due to High Gas Prices?
When we asked drivers whether or not they thought rideshare companies should reimburse for high gas prices, they had a lot to say! You can read the full article here: Should Uber and Lyft Pay Drivers More Due to High Gas Prices?
Or take a look at some of the comments below:
Pros to Uber and Lyft Paying Drivers More When Gas Prices are High
Below, we’ll share what you had to say for why Uber and Lyft should pay drivers more because of higher gas prices.
Doing So Would be Easy!
When we initially proposed this question, we thought about several complicated ways Uber and Lyft could estimate prices and raise them… but then you all came through with even easier ideas!
CaliDriver says this could all be done with a floating adjustment fee to the customer – a few cents at most.
Even easier? RideUpstate said Uber and Lyft could simply add a $1 nationwide surcharge to customers and balance it all out.
Overall, a $1 surcharge for fuel, added to the customers’ bills, really sounds like the simplest and easiest solution. It doesn’t punish EV drivers, it doesn’t involve complicated algorithms, and let’s be honest, customers across all platforms are already used to seeing surcharges at this point!
Paying Drivers More for Gas Will Bring More Drivers Back to the Platform
There’s still a massive rideshare driver shortage, and Uber and Lyft have poured thousands into bringing new and prior drivers back to their platforms. But what if they just raised prices to pay for gas costs?
Readers like Collin and Patricia suggested this idea, with the idea being that an announcement from Uber and Lyft like this would also serve a purpose to bring drivers back!
Cons to Uber and Lyft Paying Drivers More When Gas Prices are High
Of course, many of you disagreed with the statement “Uber and Lyft should pay drivers more when gas prices are high” and had plenty of reasons to back up your thoughts. Below, we’ll share reasons why you don’t think Uber and Lyft should pay more when gas prices are high.
Standard mileage deduction
As Uber drivers, we can (and should) write off our mileage at the end of the year. The gas needed to operate our vehicles for rideshare is built into this deduction. The current rate is $0.56 per mile according to the IRS for business miles.
My husband and I just calculated the cost to operate his vehicle. Without maintenance, it costs about $0.12 to operate. With maintenance included it goes up to about $0.22 per mile to operate. This is on a Toyota Camry getting an average of 30 mpg at a cost of $3.00 per gallon of gas.
So, with the IRS rate of $0.56 per mile, and the actual cost to operate and maintain his vehicle at $0.22 per mile, we’re ahead of the ballgame there.
As one Twitter user noted, it’s up to us to determine what we need our earnings to be based on considerations like driver expenses and reimbursement rates.
Drivers Are Not Employees
In every Uber driver survey we’ve conducted, an overwhelming majority of drivers want to remain independent contractors (well over 50%). If drivers wanted to be employees, they could argue for reimbursement for fuel costs – but they’re not and most drivers don’t want to be.
As these two social media commenters noted, if earnings aren’t cutting it for drivers, in the end they’re free to move on (or use different driving strategies to earn more in less time.)
One thing all rideshare and delivery drivers need to keep in the top of their minds is the cost of operating their business. Your car comes with expenses and everything you do on rideshare and delivery makes a difference for your bottom line. If the cost of gas increases, you need to know how much that is going to affect your ability to earn and ways to help offset the increase.
Only you can say if doing these gig jobs is still worthwhile when the price of gas increases or the amount you’re paid per ride decreases or any other change happens that affects your ability to do your job.
However, if you do choose to continue driving and delivering, know that there are options out there. You can use apps to identify cheaper gas prices (or get/share a warehouse membership to get cheaper gas), use credit card rewards to get discounts on fuel, and more.
Have you noticed the increase in gas prices? Has it affected how you drive or deliver?
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Get started as a gig worker today! Learn more:
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-Paula @ RSG