Surge in gas prices pushing ride-hailing, taxi drivers on edge: ‘Very difficult’

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WATCH: Rideshare, taxi drivers describe impact of rising gas prices – Mar 7, 2022

Record-high gas prices in Canada are driving concerns for taxi and ride-hailing app workers across the country, with many struggling to make ends meet.

The Canadian national average for gas prices has surpassed $2 per litre for the first time ever this year, according to GasBuddy and the CAA. That means drivers are spending more to fill up their tanks and working longer hours on the road.

Read more: Gas prices are at record highs. How the cost of fuel for 5 cars has changed

Earla Phillips, a long-time Uber and Lyft driver in Toronto, said before the gas price hike kicked in, half a tank on her sedan costing $30 would get her through the day. Now, she finds herself spending $50 and working extra hours to make up the difference.

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“It’s been very difficult,” Phillips told Global News.

“Almost doubling of the cost to operate with gas prices mean that we’re … getting paid a lot less than we were just a year ago — and that’s really hard,” she said.

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Linda Caswell, who started driving for Uber Eats in February as a side gig to make some extra money, said she is earning almost half of when she first began.

With the depleted earnings, Caswell is now considering spending less time on the road and looking for other at-home remote options to help pay her debt faster.

“It’s just really disheartening,” the municipal worker from Mississauga told Global News.

The cost to fully fill up a 2022 Honda Civic LX in June over three years is shown on June 6, 2022. Global News graphic

Taxi drivers are also feeling the pinch of the soaring gas prices, driven largely by Russia’s invasion of Ukraine and the corresponding sanctions on Moscow.

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Mohan Kang, president of the B.C. Taxi Association, said as an essential service, there is no escape or shortcut in trying to navigate around the sky-high fuel costs.

“We are very concerned about the rising (gas) price,” he told Global News.

“I can park my private car at home and use it only when it is essential, but in case of cabs, we have to be on the road to provide this service to the communities.”

Kang said there is a direct “drastic” impact on the taxi drivers, as the higher fuel costs are eating away their daily take-home income.

Is the fuel surcharge helping?

To help offset the high gas costs, both Uber and Lyft introduced a fuel surcharge in March that is still in effect until further notice.

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Lyft has added a $0.55 fuel surcharge to each ride and Uber is charging riders an additional $0.50 on every ride.

“It’s important to say this surcharge is temporary and designed to try and keep earnings high during this difficult moment,” said Uber in a post announcing the changes on May 11.

Read more: Uber to add a ‘fuel surcharge’ to ride sharing, Uber Eats price

However, that has done little to solve drivers’ problems.

Caswell said a surcharge of $0.35 for Uber Eats deliveries that is set to end on June 15 is a “piddly amount” that was “not making a dent.”

Phillips said a flat rate of $0.50 is “not enough,” especially for longer trips. As discussed on online forums, most drivers are in favour of seeing a per kilometer surcharge, she said.

“Quite often, we’re doing longer trips and it just is not making any impact or compensating us in a fair way for the increase in operating costs.”

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Uber adds fuel surcharge to offset spike in gas prices – Mar 11, 2022

Experts say the fixed adjustments may offer some relief to drivers, but it’s not sufficient enough to counter the rapid rise in fuel prices, which are expected to remain high or even go up in the weeks and months ahead.

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“It’s a very small surcharge and I don’t think it accounts for the drastic jump in the price of fuel,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

Read more: Toronto considers increasing taxi fares to combat gas costs

The added fuel costs could potentially steer drivers away from using the apps, he said.

“It’s a very precarious issue. It’s hard to navigate, given the fact that many of these drivers and many of these delivery services rely on low fees to be successful.”

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Canadian ridesharing app Uride has added a gas fee in the majority of the cities it operates in, as well as increased the per kilometre and per minute rate to reflect the extra costs drivers have to incur due to gas and inflation.

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Besides closely monitoring the gas prices and adjusting fares as needed, the company told Global News it is checking in on drivers weekly to see how they were doing and what challenges they have.

“It’s been scary for a lot of drivers,” said Cody Ruberto, Uride Founder and CEO, in an email.

“Gas isn’t the only challenge drivers are facing. Some drivers have been waiting on car parts for many months due to supply shortages.”

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A growing number of drivers are turning to carpooling to reduce their gas costs.

Poparide, which provides city-to-city carpooling service in Canada, has seen an 80 per cent increase in the number of drivers registered to its platform since March 1, 2022, the company told Global News.

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“Over the May long weekend, we saw record growth of 800 per cent year-over-year as gas prices and inflation reached new highs,” said Joe Kitos, vice president of marketing at Poparide, in an emailed statement.

While the company has not introduced a fuel surcharge, it has adjusted its maximum price from 15 cents per km to 17 cents per km.

“In addition, drivers have the flexibility to set the price for each trip, provided they do not exceed our platform-wide maximum price,” said Kitos.

How can drivers be supported?

In an emailed response to Global News, Uber said the recent spike in gas prices has affected rideshare and delivery drivers more than most.

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However, earnings right now are among the highest the company has ever seen for drivers across the country, according to Uber.

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In Canada, like in the United States, Uber drivers are considered independent, self-employed contractors.

In contrast, Britain’s Uber drivers are classified as workers, entitled to a minimum wage, vacation pay and pension plan. The change was introduced in March 2021 following a Supreme Court ruling.

Ming Hu, professor of business operations and analytics at University of Toronto’s Rotman School of Management, says to better support long-term Uber drivers in Canada, there should be similar legislation that does require the platform to classify them as employees.

“In that case then the drivers are sheltered away from any gas price fluctuations and the company will absorb that volatility,” he told Global News.

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As things stand, Canadian Uber and Lyft drivers may have the flexibility of making their own hours but their earnings are largely reliant on the rates set by the ride-hailing companies.

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“We have no control over the rates that we’re paid and we have no ability to negotiate those rates,” said Phillips.

She said a rate increase while the industry reels from the effects of the gas price surge would only be fair to drivers “who are hurting.”

Read more: Some RVers say high gasoline prices could keep them closer to home

Uber says it is always looking for feedback through multiple channels from drivers who use the platform.

Next week, the company is planning to hold a roundtable with drivers in Toronto.

“I really hope that Uber does change something because I would like to continue to do this … but just the way that it is right now, it’s not really something I’m going to be able to do anymore,” said Caswell.

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