The impact of high gas prices hits rideshare and delivery drivers really hard. If you’re wondering things like “Does Uber pay for gas?” or “Does DoorDash pay for gas?” you might be surprised at the answers. Drivers are independent contractors who pay for the cost of doing business directly out of their own pockets. To pay for gas, they are now taking nearly twice as much money out of their earnings than they did a year ago. The pain is real, and it is also quite intense.
Gridwise is an app that rideshare and delivery drivers use as an assistant. It tracks mileage, syncs with drivers’ company apps to track earnings, and allows them to record expenses. Gridwise also has features that help drivers work “smarter,” such as airport information and insight on where they can potentially get the most business. It is known as the best mileage tracking app for Uber and DoorDash, and drivers from many other rideshare and delivery services are avid users as well.
Gridwise has a close and powerful connection with the large and diverse community of gig drivers. And, as costs have been rising, we’ve noticed that drivers are looking more intensely than ever for ways to save. This makes it easier for those of us who are advertising to rideshare and delivery drivers to get more of their attention.
In this post, we will share what we’ve found about the way drivers are coping with rising costs and how this can help you promote helpful products and services that will make the lives of rideshare and delivery drivers easier.
We will look at
- gas price pain: how rising gas prices change driver behavior
- future possibilities: how gig driving could change
- how Gridwise helps drivers
- delivery driver and rideshare advertising: how your company benefits from helping drivers, and how your brand can make a direct impact
Gas price pain: how rising gas prices change driver behavior
With a network of more than 300,000 drivers, Gridwise can always get an idea of what’s going on in their world. We recently polled 1,000 rideshare and delivery drivers, and what they told us proves they are and will be changing their behavior as a result of rising costs.
While some drivers, due to gas price hikes, cut down their more active schedules to working just a few days a week, about 75% of drivers said they are driving as much as always. Driving is a matter of necessity for them, because it is their full time job. Still, they are changing the way that they do business in an attempt to defray the high cost of fuel.
The rideshare and delivery companies have tried to help with surcharges and fuel subsidies. There is no company Uber gas card or Lyft gas reimbursement, but both companies have imposed a surcharge on customers to help drivers. Uber’s surcharge varies from 45 to 55 cents per ride, depending on local gas prices. This amount, even though it reflects the companies’ recognition of the burden being placed on drivers, has a long way to go before it actually covers their costs. In a few select places, such as New York City, drivers were given a 5.3% increase in their minimum wage rate to cover the higher fuel costs, so the surcharge was not applied in that market.
Our data show that nationwide, most rideshare and delivery earnings rose over the course of the first quarter of 2022. In the case of rideshare, drivers for Uber and Lyft seem to have had healthy increases in their monthly gross earnings. Uber drivers earned $348.22 on average in January, $463.71 in February, and $537.29 in March. Lyft had similar increases, with average January earnings at $329.24, rising in February to $442.29, and peaking in March at $537.94.
Delivery drivers didn’t see the same kind of increase in gross earnings. Theirs either increased slightly, remained stable, and in some cases, decreased slightly over the three-month period. For example, DoorDash drivers earned an average of $220.16 in January, $224.26 in February, and $244.86 in March. Uber Eats drivers brought in $128.89 in January, $130.12 in February, and just $114.81 in March.
Remembering that these numbers represent gross earnings, it leads us to wonder if the increases were due to the gas surcharge or bonuses that might have been offered, particularly by the rideshare companies. There have been reports of enticing offers the companies extended to get drivers to stay on the road, or to possibly encourage new ones to get started.
Drivers don’t seem to be feeling this rise in earnings, however, and that could definitely be due to the skyrocketing price of fuel. It seems that the efforts the companies have made, to add surcharges, offer gas deals, or award bonuses, are not making drivers feel they’re getting the support they need.
In fact, a survey we conducted within our driver community told us that 70% of them don’t believe the added fee as represented by the Uber fuel surcharge is sufficient to cover the 43% rise in gas prices since last year. There is no DoorDash gas surcharge, but the company offers Dashers 10% back on their purchase of gas, as long as they pay with DasherDirect, which functions as a kind of DoorDash gas card. DoorDash extended their 10% cash back deal through August 31, 2022, having renewed it at the end of April.
While these efforts help somewhat, drivers are still showing signs that they will modify their driving habits to keep costs down. Here are some changing driver attitudes we’ve heard about and noticed after analyzing our data:
Drivers are making fewer trips. We collected data from February through March 2022 that reveals a declining trend in the number of trips drivers are making. This has been the case for virtually every rideshare and delivery service, including Lyft, Uber, Uber Eats, Grubhub, and Instacart. And, although gas prices eased some in April, they are on the rise again, and are expected to stay high for the summer driving season.
Drivers are more selective about the rideshare trips and orders they accept. When gas was cheap, drivers would pretty much take every ride or order that was offered. There was a lot of competition among a large population of drivers, so passing on a ride or delivery could bring down their driver rating. Now, with fewer drivers on the road, companies are more lenient with their policies, and drivers are viewing each ping they get with an eye to how much it will be worth. They are far less likely to drive long distances to pick up orders or passengers.
Drivers are saying no to low-paying orders and rides. There are some rides and orders that are far away, but worth it, and others that are simply not. While it’s hard to put an exact number on what “not worth it” amounts to, most drivers agree that $6.50 in earnings for traveling anything over 5 miles would be pretty close. This definitely makes sense for drivers in the short term, but turning down too many requests could potentially cause customers to turn to other ways of getting rides and deliveries.
Drivers are constantly trying to cut all costs. The need for drivers to pay more for gas, maintenance, insurance, and other running costs has made them more aggressive about looking for ways to save money. Companies that offer reasonable insurance premiums, discounts of various kinds, and reductions for subscription services can easily get drivers’ attention in these times. In fact, drivers are looking for companies that will help them to cut back on their business expenses.
There’s no doubt that the equations drivers calculate when they evaluate their gigs have changed as a result of the gas price hikes. It leads us to wonder how long this will last and how it may affect gig driving in times to come.
Future possibilities: how rising costs could alter the gig driving business
The shock to the system that rising gas prices has caused is still setting in with drivers. They appear to be maneuvering and modifying their habits to minimize the impact. For now the changes we see don’t seem to indicate an immediate crisis in the supply of drivers to the rideshare and delivery businesses, but as time passes this could change.
The high price of gas is due to factors that are difficult to control or predict. Ongoing global events, from the conflict between Russia and Ukraine to changes in policy that affect domestic oil production, have and will probably continue to keep prices high. There are no indications, as of this writing, of gas prices coming down anytime soon.
The headline “Rideshare and Delivery Driver Shortage 2022” could become a reality if gig workers decide that their driving jobs are no longer providing them with enough income to meet their expenses. With inflation increasing prices on many commodities, including basic items such as food and housing, the situation gets even more complex. Drivers might leave rideshare and delivery to pursue other side hustles that provide them with a better hourly and monthly income.
Fortunately, our current data doesn’t show a steep drop in most driver activity. Unfortunately, it does show a decline in the number of trips logged, both for rideshare and delivery, across the board. For example, as gas prices rose in the last week of March, trip volume decreased 5.29% for Uber, 6.81% for Uber Eats, and 18.72% for Instacart. Lyft and Grubhub stayed rather stable.
It’s clearly getting difficult for drivers to maintain the standard of living they’re used to, and current trends aren’t indicating the imminent arrival of permanent solutions to global economic problems. That’s why, in order to keep drivers on the road, Gridwise is creating ways to offer drivers some much-needed support.
How Gridwise helps drivers
Gridwise programs, offers, and partnerships provide drivers with opportunities to cut their costs, not only for gas, but for all their ongoing expenses. Gridwise was built on the idea of helping gig drivers earn more money, but also save money through a number of programs and features. Some include gas card giveaways, driver discounts on automotive and insurance expenses, and features that improve driver efficiency like Where and When to Drive.
However, our newest program sets us apart by giving us the opportunity to directly impact our users’ wallets with Gridwise Gas.
In partnership with GasBuddy, Gridwise now offers a significant gig driver gas discount of up to 50 cents off per gallon for our users on up to 100 gallons a month. Drivers pay with a card that is accepted at 95% of service stations.
Delivery driver and rideshare advertising: how your company benefits from helping drivers, and how you can make a direct impact
Gig drivers are feeling the pain at the pump; and Gridwise partners have an opportunity to make a direct impact on over 300,000 of them. We’ve designed a Gridwise Gas sponsorship to help your brand stand out among the rest by proving your dedication to helping gig drivers afford to stay on the road. With multiple levels of commitment available, we’ve made it easy for any brand to show their support by participating in the Gridwise Gas Program Sponsorship, and many other opportunities.
Explore the many opportunities for advertising with Gridwise here, and…
