Uber, Lyft drivers pinched by higher gasoline prices
By Ali BEKHTAOUI AFP • June 2, 2018
New York (AFP) - Standing beside the Japanese sedan he
uses to transport his Uber customers, Fahd lamented the higher gasoline prices
that are pinching his bottom line.
"Between the beginning of the month and today, my
refueling went from $39 to $50," the Moroccan-born driver said.
Fahd, who did not want his last name published, has
chauffeured clients through the arteries and highways of Manhattan for Uber for
the last three years during which he has seen gasoline prices double.
As oil prices have gradually increased, gasoline prices
in the US have risen sharply over the last two years.
The increase is bitter pill for those who toil in the
increasingly popular ridesharing business. Fuel is one of the main costs facing
drivers who work for Uber, Lyft and other smaller application-based services.
Gasoline prices have jumped to $2.96 for a gallon of
regular, the lowest grade, up from $2.38 a year ago. That's an increase of 37
percent from August 2016, according to data from the American Automobile
Association.
"Until recently, I used to put $30 of gas every
morning before taking my service," said Amrit, who averages about 12 hours
a day of work as a driver for both Uber and Lyft.
"This gradually turned into $40 to $45."
- Discounted fuel -
After a two-year dive, oil prices began recovering in spring
2016 and have stayed higher amid OPEC production agreements and rising global
demand.
The oil market has recently gotten a lift from the
uncertainty generated by the US pullout from the Iran nuclear accord and by
ongoing strife in Venezuela.
Under the systems set up by Uber and Lyft, the companies
set prices for clients and pay levels for drivers that are not automatically
affected by fluctuations in gasoline prices.
The rideshare companies are too new to have experienced
an all-out spike in gasoline prices, such as when US gasoline prices rose above
$4.00 a gallon in June 2008 shortly before the financial crisis.
But the companies have established some programs to try
to cushion the blow to drivers.
For example, Uber has created a debit card that gives
drivers a three percent discount when they refill their cars at ExxonMobil gas
stations. The discount is only 1.5 percent at other stations.
Uber also agreed to increase fares by five to 10 percent
in certain US cities, such as Los Angeles and Washington, due in part to higher
gasoline prices.
And Lyft has set up a program with Shell to offer
discounts of at least five cents a gallon for refilling at participating Shell
stations.
But drivers say the programs don't make up for the rising
prices.
"These reductions are not enough," Fahd said.
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