Your next Uber ride will probably cost an extra 50 cents — and skyrocketing gas prices are to blame.
Rideshare and delivery behemoth Uber is testing out a fuel surcharge, starting March 16, to help its army of drivers cope with the soaring cost of gas.
According to Uber’s announcement, the new fee will range between 35 and 55 cents, depending on location and whether the trip is a delivery or a rideshare. The entire fee will go to the driver, Uber says.
“We know that prices have been going up across the economy,” Liza Winship, Uber’s head of driver operations, wrote on the company’s blog, “so we’ve done our best to help drivers and couriers without placing too much additional burden on consumers.”
Uber says the new gas surcharge will be temporary, “for at least the next 60 days.”
“Over the coming weeks we plan to listen closely to feedback from consumers, couriers and drivers,” Winship added. “We’ll also continue to track gas price movements to determine if we need to make additional changes.”
Uber’s announcement is in response to surging gas prices across the country.
According to the auto club AAA, average gas prices for regular, unleaded fuel recently hit a record high and cost $4.32 as of Monday — an increase of 26 cents since just last week. In some areas, prices are much higher. For example, average gas prices in California are currently at $5.74.
Meanwhile, consumer prices are on the rise. In February, prices rose 7.9% compared to the year prior, the highest increase since 1982, according to the Department of Labor.
Accounting for much of that increase were the staggering costs of gas and vehicles. During that same period of time the Labor Department says gas prices rose 38%, new and used vehicle prices increased 12.4% and 41.2%, respectively. What’s worse: Since these inflation figures look at February, they don’t fully reflect the impact of the Russia-Ukraine war on oil prices.
“We know the unprecedented spike in gas prices and rising energy costs have affected how much money you’re taking home,” Uber sent in an email to drivers. “We hope that this support helps your bottom line while gas prices are at record highs.”
Drivers for Uber are not employees. They're considered independent contractors, and usually when gas prices go up, they're expected to stomach the blow to their take-home pay as a cost of doing business.
Uber prices: How much extra will rides cost?
Uber says the surcharge for rideshare services will be between 45 and 55 cents per trip. For Uber Eats, the charge will range from 35 cents to 45 cents per order.
The surcharge does not apply to drivers or customers in New York City, Uber says, citing a 5.3% increase to Uber drivers’ “minimum earnings standard” that went into effect earlier this month.
UPDATE: Lyft will also be implementing a similar fuel surcharge “in the coming days,” a spokesperson confirmed to Money on Monday.
"Given the rapid rise in gas prices,” Lyft said in an emailed statement, “we’ll be asking riders to pay a temporary fuel surcharge, all of which will go to drivers. We’ll share more details shortly."