“I Had To Return My Vehicle”: Rideshare Drivers Are Struggling To Pay Their Bills Amid Rising Gas Prices
Many drivers were barely making ends meet even before the cost of gas began to skyrocket. Now some are looking for new jobs.
LOS ANGELES — Raul Rivera’s budget stretched thinner and thinner as gas prices rose — from $2.26 a gallon in his native New York City at the start of 2021, to $2.80 last spring, to more than $3 last summer, to around $3.40 through the holidays. As a rideshare driver for Uber, he spent 12 hours on the road each day, he said, filling up his Toyota Camry’s tank at least five or six times most weeks, a cost he had to cover as an independent contractor. But as his daily expenses rose, his earnings from fares stayed the same.
Then, as the war in Ukraine disrupted global oil supplies, nudging New York City’s gas price to $4.28 in the first week of March, Rivera’s budget finally ruptured. He could no longer pay his $400 weekly bill to the fleet owner leasing him the Camry.
“I fell behind,” said Rivera, who is 52 and lives in the South Bronx. “I had to return my vehicle.”
For rideshare drivers across the country, rising gas prices in recent months have pushed already precarious financial conditions toward a breaking point, leaving some to search for other jobs. With rent moratoriums and government stimulus programs expiring last year, low-wage workers across every industry have struggled to make ends meet as the country enters the third year of the pandemic. Like hourly service workers in food and retail jobs unsure how many shifts they’re able to pick up on any given week, rideshare drivers operate under daily uncertainty over how much money they'll have coming in — and whether it will be enough to cover basic necessities — as customer demand, traffic congestion, and gas prices oscillate, sometimes without warning.
“What cost me $60 last week is now costing me $90 this week,” said Ben Valdez, who drives for Uber and Lyft in Los Angeles, where per-gallon rates reached $5.89 in the third week of March, around $2 higher than the price a year earlier. “My average fill-up is no less than $60, and that could be a half tank, could be a quarter tank.”
Over the past several months, rideshare drivers in London, Lisbon, Rome, New York City, and elsewhere around the world have held protests calling for higher pay. Rivera and other members of Justice for App Workers, a coalition of tens of thousands of rideshare and delivery drivers, rallied in Manhattan in February demanding that companies offer them health insurance and the right to unionize, among other demands. In response to recent spikes in gas prices, Uber and Lyft each added a surcharge to bolster drivers’ incomes — though the raise will not apply in New York City, where the Taxi and Limousine Commission increased minimum pay for drivers by 5.3% last month. But rideshare drivers said the earnings bump comes after years of the two companies decreasing their pay-per-mile rates. Rivera said his rate dropped from around $2.75 a mile to $1.75 after he started in 2016. Taje, a Los Angeles driver who asked to be referred to only by his first name for fear of losing work with rideshare companies, said that his rate dropped from around $1.20 to 64 cents after he started in 2017. Five rideshare workers who spoke to BuzzFeed News said that the costs of driving continued to rise faster than revenues, turning a once-reliable gig increasingly untenable.
“This is supposed to be a lucrative business,” Rivera said. “If you do this in New York City, you shouldn’t be struggling, but the companies, Uber and Lyft, they squeeze the driver because it forces the driver to do more trips. That’s all they’re concerned about is doing more trips.”
Uber and Lyft started the temporary surcharges on March 16 to help drivers balance the extra charges for at least the next 60 days. Lyft drivers will receive a 55-cent bonus per ride, while Uber drivers will make between 45 cents and 55 cents more per ride or a slightly smaller surcharge for Uber Eats orders.
“Our hope is that this temporary measure will help ease the burden, but we’ll continue to listen to feedback and may make changes in the future,” Uber Head of Driver Operations Liza Winship wrote in a statement. “To try to keep their earnings steady, drivers have had to work more hours, heightening the risk for them and others on the road around them.”
Winship also said that Uber is using the period of heightened gas prices to push electric vehicle use, including its Tesla rentals. In addition to surcharges, Lyft drivers can apply for company debit cards that allow them to earn up to 5% cash back on gas through the end of June, according to company spokesperson CJ Macklin, who referred BuzzFeed News to a blog post listing Lyft’s responses to rising gas prices.
Drivers have characterized the actions as insufficient. A driver able to complete four rides per hour would earn an additional $88 or so from the surcharges for every 40 hours of work, but 40 hours of driving typically means having to fill up the tank at least two or three times, for a total cost exceeding $100 under current the national average of $4.25 per gallon — and even more for those in California, New York, and other states with higher prices.
“If you’re not giving people enough to make what they need to repair their car, to sleep and things like that, you’ve got a lot of exhausted people,” said Jonathan Tipton Meyers, who has contracted for Uber and Lyft in Los Angeles. “Rising gas prices or any other phenomenon will only exacerbate whatever paradigms are occurring already.”
Tipton Meyers said he has been in three accidents since he started driving in 2016, including one incident when a fellow rideshare driver ran into him. Rivera said long hours on the job contributed to an accident he takes the blame for, slamming into an SUV at an intersection in Midtown Manhattan.
“We have to be on the road so much to make sure that ends meet,” Rivera said.
Drivers have few options to stabilize their income: work more hours, leave the flexibility of rideshare gigs, or invest in a more fuel-efficient vehicle.
Taje normally refills his tank every other day. Even when he finds the cheapest gas station near him, he spends about $260 each week refilling his tank now compared to around $190 before.
Recently, Taje said that he received an email from Uber with the subject line “Stop paying for gas” and an offer advertising Teslas available to rent for $334 a week through a partnership with the company. As much as the prospect of no longer relying on gas appealed to him, the price of the electric car was just too high, he said.
“You’d be having to do a lot of miles, a lot of rides and paying for the charging of the car before you make any money,” he said.
But for Naomi Ogutu, a rideshare driver in New Jersey, leaving behind the gas pumps is worth the short-term financial hit. During the second week of March, she began exploring her options. She met with a representative for Revel, which last year launched a ridesharing service featuring a fleet of Teslas. She browsed jobs with limousine companies that cover the cost of gas but offer less flexibility than rideshare work, which has allowed her to transport her three kids to and from school.
“I love driving so much, but our expenses are skyrocketing while our fares are remaining the same,” said Ogutu, who began with rideshare companies in 2016 after immigrating to the US from Kenya. “I have not yet settled my mind on what I need to do.”
In the meantime, she and other rideshare drivers hitch their financial conditions to forces beyond their control.
Tipton Meyers said that to make the $4,000 he needs each month to pay his bills, he likens his job to a “video game,” switching between apps depending on current offers and bonuses and sticking to heavily trafficked areas like Santa Monica, Venice, and around the USC campus.
Ogutu said she often finds herself driving customers from New Jersey to New York City in the mornings, a trip that brings her a one-way fare upwards of $75 but ultimately cuts into her profits because she doesn’t have a New York City Taxi and Limousine Commission license that would allow her to pick up passengers while she’s there. That license, along with the insurance fees tied to it, is “too expensive” for drivers who aren’t regularly getting New York City fares, she said. “You have to come back empty.”
The ride back, over bridges or through tunnels, brings tolls and thick traffic and sometimes takes more than two hours if she’s returning from deep Brooklyn or Long Island. Drivers don’t know a passenger's destination until they pick them up. Despite the inconvenience, Ogutu said she is hesitant to kick out riders once she sees they’re heading to the city for fear of damaging her rating or getting complaints that could get her booted from Uber or Lyft.
In the meantime, she hopes customers recognize the difficulties facing drivers and help mitigate their lost income with more tips "now that the whole of America knows how expensive it is to buy gas," she said. "I know everybody’s experiencing the pinch, but just look at your driver when they're driving you and know that we're having a hard time."