As Gas Prices Rise, Fares for Ride-Hailing Drivers Lag Behind

Driven by inflation and Russia’s invasion of Ukraine, the average price for a gallon of gas has soared to $4.17 nationwide, the highest average price in 14 years. Here in the Bay Area, the price is even higher, hovering around $5.50. While rising gas prices affect nearly every corner of the economy, some of the people feeling the effects most directly are Bay Area ride-hailing and taxi drivers.

Rondu Gantt is a San Francisco resident who drives for Lyft and DoorDash. He says that companies should be paying their drivers more when gas prices spike.

“I think that it’s necessary to increase every driver’s base fare. If you don't want to increase the rate of pay, increase the base fare. Making a $5 minimum would definitely help cover the cap cost,” Gantt said.

While Lyft has not increased base fares or pay rates, it has partnered with a fuel cash-back program called GetUpside where drivers can earn $0.32 in cash back per gallon at certain gas stations, as well as 2% cash back when they use a Lyft debit card. Ride-hailing service Uber also has partnered with GetUpside.

“This program makes it easy for drivers to know where to get the best cash-back savings on gas, meaning more of the money they earn with Lyft can stay in their pockets,” said Zach Greenberger, head of strategic business development and global supply management at Lyft.

“That’s garbage,” said Sergio Avedian, senior contributor at The Rideshare Guy, a blog focused on the gig economy. He’s also a part-time ride-hailing driver. “I'm a member of GetUpside. All the GetUpside stations where you can get 20 or 25 cents back have prices that are already 60 to 80 cents higher than where I buy my gas normally.”

Because ride-hailing drivers are classified as independent contractors and not employees, they must pay out of pocket for car parts and repairs. Yet, unlike other independent contractors, like an electrician or a plumber, for instance, they can’t set their own rates.

“So it's kind of a silly point that Uber and Lyft make when they say, ‘We want you to be independent contractors but, wait a minute, you cannot decide on the price you charge for this ride,’” Avedian said.

In the meantime, an online petition has been started, asking Uber and Lyft to increase rates for drivers.

Like ride-hailing drivers, San Francisco taxicab drivers also are not able to independently set their rates. Mark Gruberg has been a taxi driver in the city for nearly 40 years, and says taxicab drivers are also feeling the squeeze.

“After the rental of the taxi, which is the biggest expense, fuel prices would be the next biggest expense," said Gruberg. "It's cutting a deep hole in pockets that are already pretty empty for a variety of reasons, including Uber and Lyft, including the pandemic, and including inflation in general.”

Gruberg says that any fare hikes would need to be approved by the San Francisco Municipal Transportation Agency. The last time taxi fares were increased was in 2011.

“Nothing like that has been scheduled and, far as I know, even discussed with them yet, because this latest blow is very recent, but I suspect that this conversation will come up,” said Gruberg.

The San Francisco Taxi Workers Alliance is set to meet Wednesday night.

Avedian says that barring any fare increases, there are some things ride-hailing drivers can do to make their work more profitable.

“Figure out what it costs you to run your car per hour, and just drive when you think you're profitable, like when Uber and Lyft offer you extra incentives on top of the regular base pay,” said Avedian.

As the war in Ukraine has intensified, President Biden announced yesterday further sanctions on Russia, declaring the United States would no longer import any Russian gas, oil or energy. "Since [Vladimir] Putin began his military buildup on Ukrainian borders, just since then, the price of the gas at the pump in America went up 75 cents. And with this action, it’s going to go up further,” Biden said.

For now, Bay Area ride-hailing drivers will be picking up the bill.

This post includes reporting from KQED's María Fernanda Bernal.