Were those gas surcharges companies gave drivers this spring too good to be true? It looks that way. While Uber Eats and DoorDash lent a hand to drivers as they dealt with crippling fuel costs for a limited period of time, that’s all changing. These big delivery companies are doing a whole other kind of “takeaway,” and it involves their gas incentive programs. In this post, we’ll fill you in on the details, provide insight into the companies’ rationale, and give you tools you can depend on from now on. Here’s how it will go.
- Killer gas prices and for DoorDash and Uber Eats drivers: companies pull back subsidies
- Why delivery companies are scaling back their support
- Gas rewards for rideshare and delivery drivers that won’t go away
Killer gas prices for DoorDash and Uber Eats drivers: companies pull back subsidies
The crisis created by the steep rise in fuel prices is on every driver’s mind. When the surge in gas prices first happened, the companies came to the aid of their drivers by offering bonuses to help cover their pumpside costs.They got this money from surcharges they tagged onto customer orders. Uber Eats drivers received $0.45 per order, and Dashers got weekly bonuses beginning at $5.00 if they covered 100 miles or more while making deliveries.
No one is saying these measures even came close to covering the actual burden of gas price increases, but they were at least some help. Now, though, things have changed. It appears there are limits to the good things companies like Uber, Lyft, and DoorDash can do for their drivers.
Uber announced that the Uber Eats surcharge on customers will no longer be applied as of June 15th. Similarly, DoorDash has stopped offering those weekly bonuses to help cover the cost of gas. Instead, they’re offering a cash-back program, but it has been extended only to August 31st.
Uber is keeping its $0.55 per ride surcharge on rideshare passengers. But, just like the measures taken for delivery drivers, this doesn’t come close to relieving the hurt of real, pumped-up fuel prices.
To say the impact on drivers is painful is an understatement, and the rise in prices shows no signs of letting up. According to AAA, prices for regular gas have risen from a national average of $3.041 just one year ago to $4.599. That amounts to an increase of 51%.
As we go further into summer, prices could go up even more. Pressure on drivers is mounting, so why are the companies pulling back the little bit of support they’ve offered over the last few months?
Why delivery companies are scaling back their support
Drivers might wonder why delivery companies have abandoned their efforts to help their drivers handle the high gas prices.
Company rationale rests in the business behind food delivery in the gig economy. Drivers and customers are not the only people company executives want to keep happy. There are those who have invested their money in company stock, and these investors put pressure on executives to perform.
Stockholders in Uber and DoorDash are not very happy with what’s happened to their shares so far in 2022. According to this NBC News article, the delivery business has been slowing down. This is largely the result of pandemic restrictions being lifted, and those formerly avid delivery customers going back to eating in restaurants rather than having all their prepared meals delivered.
Inflation is another reason cited for the decline of delivery orders. The perfect storm that lifted delivery to its heights in 2020 and 2021 is regrouping and bringing the delivery business down to much lower performance levels.
After reaching a high of $246 in November 2020, DoorDash shares have done a “Dash Crash” and are now down to $89 per share. That’s a 64% loss. Uber shares went into a tailspin also, falling around 31%, from $45 to $31.
For several years, shareholders in these companies have pressured executives to become profitable, and that road has been long and rough. In some cases, the companies did actually make a profit, but it’s hard to say how long their ability to stay in the black will hold out. Now it seems profitability for these businesses is going to become more difficult to achieve than ever before.
This means the companies must cut operating costs in order to do what they promised their shareholders they would do—make money. US News reports that Uber is cutting expenses across the board. That is to say, they plan to scale back the costs of their operations by slowing down their rate of hiring, slashing marketing expenditures, and ending most driver incentives.
Remember, about a year ago, when Uber and Lyft offered big bonuses to drivers brave enough to return after the pandemic? It worked. Now Uber says they have restored the pool of drivers back to what it was before the pandemic happened. Those incentives are no longer needed, so even the extra perks that haven’t already evaporated will soon disappear.
It’s worth noting that Uber, while it plans to erase the gas subsidy for Uber Eats drivers, will continue the $0.55 surcharge, as a way of offering partial rideshare driver gas reimbursement for those drivers. They probably (wisely) intuit that if they do nothing for rideshare drivers, they’ll motor away, and cruise right off the Uber platform.
As for Uber Eats drivers, the company feels confident that they can shift to doing rideshare if they’re unhappy delivering food. Conveniently for Uber, this allows them to partially divest from what is being seen as a food delivery business that’s in decline, without abandoning it completely. A shift of this kind can also boost their rideshare driver supply.
If they don’t take measures to help them, Uber’s rideshare business could lose drivers to Lyft, where executives say they are holding on to the driver incentives until they feel they’ve brought their pool of drivers up to pre-pandemic levels.
That doesn’t mean Lyft isn’t facing the need to cut back on costs, though. This article from Investor Place states that Lyft stock is at a 52-week low and that company executives will take measures to contain costs, but will still continue driver incentives, at least for now. They offer the same as Uber, $0.55 per ride, to help drivers cover their fuel costs.
Even those subsidies for rideshare drivers don’t do a lot for them, and the money comes from customers who are far less likely to give up the convenience of rideshare than they are to cook at home or go out to get their own food.
Thinking of switching to another delivery service? It may help, it may not. Unless the economy improves quickly, even more companies are likely to find themselves in the same kind of situation, where they have to cut costs if they want to make a profit.
That means that you, as a driver, need to find ways to survive in spite of the rising cost of gas and the disinclination on the part of companies to help you cover it.
Gas rewards for rideshare and delivery drivers that won’t go away
When your delivery company doesn’t bring you the kind of support you need, or your rideshare platform stops propping you up, there is a program you can always count on. Gridwise Gas offers gas rewards for rideshare and delivery drivers that won’t expire. It’s an ongoing program with a proven track record. Here’s what Gridwise Gas’ partnership with GasBuddy does for you:
- offers as much as $0.25 per gallon off with every fill-up
- links your bank account to your Gridwise gas card for easy payment
- continues to offer savings, even if your gig driving company ends its gas program
Gridwise Gas is an awesome program as it is, but soon you’ll be able to save even more! Keep your eyes on Gridwise for updates to Gridwise Gas you’re going to love.
Gridwise Gas is the best gas card for Uber drivers and offers the most dependable gas discount for DoorDash drivers. Sign up now for Gridwise Gas through the free Gridwise app to get on board.
While you’re at it, be sure to use Gridwise to cash in on more actions you can take to cut costs:
- Track mileage: Track every mile to get your maximum mileage deduction, and get compensated for wear and tear.
- Record expenses: Keep an account of what you spend to keep your car running with our earnings and expense tracking tools.
- Drive smarter: Use Gridwise features When to Drive and Where to Drive to minimize your fuel usage, and maximize your earning power.
Unleash the power of the world’s best rideshare and delivery assistant.
