Rising gas prices put the brakes on ride-share drivers’ earnings

After four years of driving for Uber, Adil Chaudhry decided he had hit his limit.

Skyrocketing gas prices that began breaking records in February and have only gotten worse, along with an inflation rate that hit a 30-year high of 6.7 per cent in March all severely impacted Chaudhry’s bottom line.

And because Uber only adds an additional 50 cents per ride to offset current gas costs, Chaudhry decided to get off the road.

“The gas prices are super high, and paying only 50 cents per ride is not doing us any good,” he said. “When I used to spend $50 on gas, (per week), I’m now spending $80. So how, every ride I do, does that 50 cents add up to an extra $30? No, it doesn’t,” he said.

“I’m spending from my pocket to do these rides… I’m literally driving for free at that point.”

Several other Uber ride-share and delivery drivers told the Star they have also quit driving or are considering quitting, as their earnings aren’t what they used to be.

Chaudhry and other drivers interviewed also pointed to Uber taking around half the money of each ride. If the company gave them more of a cut from the fares, or offset the gas prices more, it might provide enough incentive to keep driving, they said.

Like other transportation and delivery services, Uber has tried to balance helping its drivers offset the sudden rise in the price of fuel, while also trying to keep its rates competitive. The company added a 35-cent fuel surcharge to Uber Eats deliveries in March, while rival ride-share service Lyft added a 55-cent fuel surcharge that same month. Last week, Toronto city council approved a $1 fuel surcharge on all taxi rides.

Uber said in an email that in the last three weeks ending May 9, median earnings (which the company says reflects gross earnings after Uber’s service fee and tips earned) among drivers who drove more than 20 hours a week in the GTA was $30.04 an hour , which is about 30 per cent more than it was in the first three weeks of February.

It also said that the first week of May saw the most drivers signing up for the platform since the pandemic began, but did not provide specific numbers.

A current GTA Uber driver, who the Star is not naming as he is concerned about backlash from the company, said that prior to gas prices increasing, his profits per month working part time for Uber were about $800-$1,000, after taxes, car maintenance and gas, he said.

But now his take home pay is about $500 a month, and the extra 50 cents per ride “doesn’t do much,” he said.

Drivers shoulder all the maintenance costs of their vehicles, and the gas prices are now making him rethink whether he wants to continue.

“The one thing that kind of helps is the flexibility. In my case, I work a 40-hour job during the week. There are other part-time jobs but it’s going to be a rigid schedule,” he said.

Valerio De Stefano, a labor law professor at Osgoode Hall Law School at York University, said there are currently debates occurring worldwide on whether gig workers like those who work for Uber and other taxi or delivery companies are employees or independent contractors.

“If they are employees, they should have access to a wide set of employment and labor rights… including minimum payments. That would also come with Uber covering the cost of gasoline,” he said.

But working for a company while not having employment status means they also cannot set their own fares, he said.

“They also don’t have the flexibility to pass some of the increased costs of gasoline to customers, because they are not the ones making the prices,” he said. “At the same time, they are not treated as employees … so they are not reimbursed for the gasoline they use for rides,” he said.

Ontario announced at the end of February that new legislation will be introduced for gig workers requiring companies to pay at least minimum wage for time spent driving or delivering to customers. App companies have been looking to fight a minimum wage cap in the last few years.

When asked if he would go back if gas prices start to fall, Chaudhry said he doubts it.

“You’ve gotten bitten by a snake once — would you ever go back?” he said.

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