Lyft, Uber Set to Add Surcharge on Rides as Gas Prices Spike
SAN FRANCISCO (KPIX 5) -- Ride-hailing services Lyft and Uber plan to add a surcharge for riders to help drivers manage the rising cost of gas across the country.
A surcharge of 55 cents per trip will begin on March 16 for traditional Uber rides and 45 cents per order for Uber Eats orders over the next 60 days, according to Uber.
"We know drivers and couriers are feeling the sting of record-high prices at the pump, so we're rolling out a temporary fuel surcharge to help. This consumer surcharge will apply to each ride or delivery and will vary by location, with 100% going directly to drivers and couriers," said Liza Winship, the head of driver operations for the U.S. and Canada in a statement. "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. Importantly, we're also seizing this moment to bolster our efforts to help drivers make the switch to electric vehicles."
Lyft did not provide a date it would begin its surcharge. In an emailed statement to KPIX 5, Lyft said, "We've been closely monitoring rising gas prices and their impact on our driver community. Driver earnings overall remain elevated compared to last year, but given the rapid rise in gas prices we'll be asking riders to pay a temporary fuel surcharge, all of which will go to drivers. We'll share more details shortly."
Fears over the dramatic increase in gas prices have some questioning practices of the oil industry.
"It would be a good way to temper pain. To me it's a bit of a Band-Aid to temper pain, not a real solution," said Jonathan Chaet, a rideshare driver who has transported passengers for Uber and Lyft over the past decade.
Chaet calculated that a surcharge like what Uber plans could make some impact in his weekly expenses depending on how many rides he gets each day. He estimates he completes about 100 rides a week but needs to fill up his compact car with gas each day.
While the surcharge will help some, Chaet says covering the cost of gas is the long-term solution rideshare drivers need.
"I don't want either company -- Uber or Lyft -- to have another nickel of my money considering how much they take per ride," he told KPIX 5, acknowledging that Lyft lets drivers rent vehicles from the company.
Lyft had not announced a similar surcharge for its customers on its blog, where it provides public updates. The company did not respond to a request from KPIX 5 asking about a possible fee on Saturday.
The dramatic increase in gas prices affect multiple industries, leading some to question if oil companies have operated fairly in recent weeks. California Congressman John Garamendi is among the signatures of a letter to the leadership in the House and Senate calling for an investigation over possible price gouging.
"No major oil company can impact the price of oil," said Steve Tadelis, a professor of economics at the UC Berkeley Haas School of Business. "If Chevron or B.P. or ARCO decides they want to change the price of crude oil, they just can't do that."
Tadelis explained that because oil is a global commodity where supply and demand dictates the price. The cost of crude oil doubled in a few months and it makes up a huge component of the cost for gas. Since the price of one is mirroring the other, he doesn't see any evidence of gouging.
"What goes up, must come down, just be patient and things will return to normal hopefully sooner," he told KPIX 5 on Saturday.
Uber points to a study by UC Riverside released last month showing that drivers in the Bay Area made an average of $39.83 an hour including tips even with increasing expenses. Drivers like Chaet say that is not his experience and he worries rising gas prices will potentially prevent him from staying in this line of work.
"If gas prices exceed $6 and stay there for a length of time, it's going to be questionable," he told KPIX 5 on Saturday. "I need an income, I need an income."
