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Uber adds surcharge as gas prices spike

Uber Outlook
Posted at 12:14 PM, Mar 12, 2022
and last updated 2022-03-12 14:14:10-05

It's getting more expensive to get a ride — and not just for drivers with their own wheels. Uber announced it will add a per-trip surcharge for both riders and deliveries, as skyrocketing gas prices put pressure on the people behind the wheel.

"We know drivers and couriers are feeling the sting of record-high prices at the pump, so we're rolling out a temporary fuel surcharge to help," said Liza Winship, head of driver operations in the U.S. and Canada for the company, in a statement. "This consumer surcharge will apply to each ride or delivery and will vary by location, with 100% going directly to drivers and couriers."

The company will add between $0.45 or $0.55 per ride and between $0.35 or $0.45 per delivery from its Uber Eats service for the next 60 days, depending on the average trip length and gas prices in each market. The surcharge will apply everywhere but New York City, where drivers saw an increase on March 1 and where most delivery workers use bicycles. The company has not seen a decrease in active drivers.

U.S. gas prices hit a record-high average $4.33 per gallon Friday, topping the record nationwide average of $4.17 per gallon set on Thursday. The company said the surcharge will not cover the full cost of gas.

This week, gas prices have spiked to their highest levels since 2008, driven by several factors, experts said. Demand for gas dropped during the pandemic, pushing prices down as Americans stayed home. But post-pandemic demand for fuel as states and municipalities dropped mask mandates and lifted lockdowns pushed prices back up. Then, Russia's invasion of Ukraine disrupted global markets and led President Biden to ban imports of Russian oil and gas, driving prices even higher.

Drivers for Uber use hybrid vehicles four times more than average American drivers, according to the company, which offers a $1 per trip financial incentive for electric vehicles and has negotiated deals for drivers on electric vehicles and charging.

"Importantly, we're also seizing this moment to bolster our efforts to help drivers make the switch to electric vehicles," said Winship.

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