'It Affects Everything': Gig Economy Firms Add Gas Price Surcharges, But Drivers Fear Wider Effects

The US Department of Energy committed to releasing 30 million barrels of oil from the country’s Strategic Petroleum Reserve earlier this month in an attempt to offset rapidly rising domestic gasoline prices and international crude oil markets.

Even before US President Joe Biden announced a total boycott of Russian petroleum products on March 8, gas prices had already spiked sharply, crossing $130 a barrel the day prior and sending financial markets into a tailspin. The release of 30 million barrels of oil from the Strategic Petroleum Reserve did little to offset the rise, and gas prices have continued to climb even as international petroleum markets have leveled off.

On Monday, The Lundberg Survey reported that average US gasoline prices had increased by 22% in two weeks’ time, and on Friday, the American Automotive Association (AAA) reported an average nationwide gas price of $4.27 per gallon. However, in some places prices are considerably higher, such as California, where the average price is $5.80 per gallon.

The costs are being felt across the board, from transportation and shipping to the consumer goods they deliver. However, for small-time operations like gig economy workers, the price spike could be a death knell to their livelihoods.

According to a survey of rideshare drivers conducted by The Rideshare Guy, 38% of those surveyed were driving less because of gas prices, and 15% had totally stopped driving.

“High gas prices are the final nail in the coffin,” Rideshare Guy writer Harry Campbell told The New York Times on Friday. “Rising gas prices make a tough situation even tougher, and for a lot of drivers, it’s sort of the final straw that pushes them over the edge.”

While in the past, gig economy firms like Uber and Doordash have tried to dodge responsibility for their massive workforces by arguing their employees are individual contractors, many of them seem to be proactive in responding to the gas hikes by adding surcharges. Doordash, Uber, and Lyft have all announced such programs, promising the extra cash will go to their drivers. On Friday, grocery delivery app Instacart joined the pack.

Jennifer Montgomery, an UberEats driver in Las Vegas, Nevada, told the NYT that the issue is more than just ride-hailing profits.

“I don’t want to deliver anymore,” she said, noting she’s already halved her shifts to compensate. “Especially when you have bills to pay and rising cost of rent and mortgage, groceries - it affects everything.”

On Wednesday, California Democrats introduced a proposal to send every taxpayer in the Golden State a “rebate” to offset the incredibly high gas prices, a phenomenon created by its refusal to import petroleum.

"This proposed $400 rebate would cover the current 51 cents-per-gallon gas tax for one full year, 52 trips to the pump for most vehicles," the lawmakers wrote in a letter to California Governor Gavin Newsom. "Notably, we believe a rebate is a better approach than suspending the gas tax - which would severely impact funding for important transportation projects and offers no guarantee that oil companies would pass on the savings to consumers."

The money would go to all California taxpayers, not just drivers, which Democrats argue is good because the state has some of the nation’s highest costs of living.