High Gas Prices Spark Uber, Lyft, and Instacart Fuel Surcharges

With gas prices at high levels across the nation, many people consider cars with a good fuel economy. However, others may be considering alternative options to driving. One such alternative option is to let someone else drive you around, saving you money overall. Unfortunately, high gas prices will still affect the drivers of those cars. So, many gig apps are adding a fuel surcharge to compensate.

Here’s a look at why gas prices are so high right now

A person pumping gas, most likely experiencing high gas prices, into a red car.
Pumping gas | Getty Images

Just like in a lot of areas of life, the reason why gas prices are so high is complicated. As Kiplinger wrote, there are actually a lot of reasons, and none is the dominant reason. The most obvious reason is the coronavirus (COVID-19). Many people stayed home in the early days of the pandemic as businesses temporarily shut their doors. This drove demand down. When demand is low, supply tends to be low as well. 

As places began to reopen, demand for gas skyrocketed. Oil companies lost a lot of money in the early months of the pandemic, so when demand was rising, many oil companies and oil-producing countries chose to keep production low so prices would stay high. That way, they would be able to make bigger profits to help them earn back the money lost during the early months of the pandemic. 

There are other factors, too. Russia supplied about 10% of America’s oil, and due to the Russian invasion of Ukraine, many countries, including America, banned Russian oil imports. On top of that, governments and regular people are actively trying to move away from an oil-powered world. As a result, oil companies may try to make as much money as possible before everyone’s driving an EV.

Uber, Lyft, and Instacart have already added fuel surcharges

High gas prices have forced folks to do things differently. According to The Verge, Uber, Lyft, and Instacart are now imposing a fuel surcharge on customers. These surcharges are supposed to be temporary, and their goal is to help drivers pay for gas when they’re doing their gig work.

Instacart has a $0.40 fuel surcharge per order, and it’ll last for a whole month. Uber passengers will pay a $0.40 or $0.55 fuel surcharge per trip, while Uber Eats customers will pay a $0.35 or $0.45 fuel surcharge per order. Lyft’s fuel surcharge is similar, as it’ll add $0.55 per trip. Both Uber and Lyft’s surcharges will last for two months.

DoorDash doesn’t have a fuel surcharge as of now. Instead, DoorDash will be helping its drivers in other ways. DoorDash will give drivers 10% back if they pay for gas with their Dasher Direct debit card. DoorDash drivers who drive more than 100 miles a week will also get a cash bonus, according to The Verge.

When will gas prices go down?

Because of the complicated factors at play, it’s currently unknown when gas prices will go down. As Kiplinger wrote, a lot of oil companies are happy making huge profits right now as it’ll mean that their shareholders will get higher dividends. That being said, market forces are still at work.

Just like how in the early days of the pandemic, when demand goes down, prices tend to go down as well. And with high gas prices, people who choose to use an alternative instead of driving can help lower demand and thus, help lower gas prices. According to Kiplinger, another way to lower demand is with a recession, which some economists expect to happen. 

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