Uber Imposes New Customer Fees to Offset Gas Prices

Harry Campbell, founder of The RideShareGuy, a popular blog for ride-hailing drivers, said Uber’s calculus might make sense for shorter trips—which the company says make up most of its rides—but discourages drivers from taking longer ones.

“That’s where you might waste a gallon or two of gas,” Mr. Campbell said. A fixed surcharge per trip regardless of distance traveled “isn’t enough,” he said.

As of February, retail gas prices in the U.S. were up 38% year-over-year, according to the U.S. Energy Information Administration. The average price per gallon of regular gas in the U.S. reached a record high on Tuesday, up nearly 18% from where it was just nine days earlier.

Uber Chief Executive Dara Khosrowshahi said Monday that driver earnings would remain consistent if every 20% increase in the cost of gas was met with a 1% increase in passenger fares.

Drivers interviewed in recent days had hoped that any fare increments would be proportional to rising gas prices so their earnings remain stable.

The situation poses a conundrum for ride-share companies. Uber and rival Lyft Inc. have grappled with a year-long driver shortage. Mounting gas prices threaten to further exacerbate the labor shortage, which the companies tempered by offering bonuses to drivers last year. At the same time, the companies are hesitant to exponentially raise prices, which are 15% to 20% higher on average today compared with last January, according to market-research firm YipitData, which based its analysis on Uber and Lyft receipts.

Mr. Campbell’s RideShareGuy blog surveyed more than 300 drivers in the past week and found that 52% said they were driving less, or had given up driving altogether, because of rising gas prices.

Robert Thompson, 50 years old, who drove for Uber and Lyft in New Hampshire, said he stopped driving two weeks ago as gas prices began climbing. Now he is working overtime as a cook instead. “I can’t justify driving any longer,” he said, adding that gas prices were the final straw amid other concerns like rising crime, inflation and health concerns from sharing cars with people.

Uber said Friday that it hadn’t seen a significant decline in the number of active drivers on its platform in the past two months.

Grubhub raised the per-mile pay for couriers earlier this week. A company spokeswoman said the increase was in line with the average per-mile cost increase for gas in drivers’ regions. Spokesmen for DoorDash Inc. and Lyft said the companies are monitoring the situation and pointed to previous partnerships that provide discounts and cash back to drivers at select fuel stations.

Write to Preetika Rana at [email protected]