IE 11 is not supported. For an optimal experience visit our site on another browser.

When the price at the pump drives your income

For gig workers whose livelihoods require driving for hours on end, “exploding” gas prices are prompting an inflection point.
Osmond Malcom fills up his tank in Chicago.
Osmond Malcolm fills up his tank in Chicago.Nima Taradji for NBC News

After two heart attacks and three back operations, Osmond Malcolm said he was ecstatic to buy a Cadillac DeVille last year. Malcolm, 43, a Grubhub and Uber Eats driver, needed a car that was comfortable to drive more than 12 hours a day. It also had to be big enough to transport his aunt, his uncle, his sister, her three kids and their children around Chicago.

But the 2001 model guzzles gasoline at about 18 miles per gallon, which has troubled Malcolm in recent weeks as the price of gas has risen. It now costs $25 more every time he fills up, which means he spends hundreds of dollars more every week than he did a month ago.

“Now I wish I had the smallest car possibly ever made,” he said.

Malcolm is among the millions of people providing online delivery and ride-sharing services whose livelihoods are directly tied to prices at the pump. As prices increase across the U.S., partly triggered by Russia’s invasion of Ukraine last month, he and others who drive for income are feeling the squeeze. Tuesday's national average of $4.244 a gallon was nearly one-fifth higher than the average a month ago and almost 50 percent higher than last year’s cost, according to data from AAA.

In response to the rising prices, Malcolm is more selective about which orders he accepts, and he often declines those that require driving longer distances in favor of shorter trips. He has started working seven days a week instead of five to recoup his losses. And he’s thinking about buying a scooter to make deliveries, instead.

"Your quality of life is pretty much shot,” Malcolm said. The rising costs prompted him to turn off his internet service at home to save money. “I have to make a decision every day of what’s important and not important.

Osmond Malcom
Osmond Malcolm. Nima Taradji for NBC News

Small gestures

The major ride-sharing and grocery and food delivery companies, which employ drivers as independent contractors and have them pay for gas out of pocket, have also taken notice.

“Many people are feeling the sting of record-high prices at the pump—and that’s certainly true of drivers and couriers,” Liza Winship, Uber’s head of driver operations in the U.S. and Canada, said in a blog post published March 11.

Uber calculated the cost increase to cars based on what they consider to be the average car for many of their drivers, company spokesperson Harry Hartcfield said. Deliveries through Uber Eats charge surcharges of 35 cents to 45 cents, while the surcharge for an Uber ride starts at 45 cents, with a ceiling of 55 cents. The exact cost is determined by location.

Lyft started charging 55 cents after it found from internal research that its drivers were spending 75 cents more per gallon than they did a year ago, spokesperson C.J. Macklin said. 

Instacart’s 40-cent surcharge was added to “help offset some of the near-term challenges” drivers face, Tom Maguire, the company’s vice president of operations and care, said in a statement.

Grubhub increased per-mile pay to reflect regional price increases, company spokesperson Jenna DeMarco said.

Some companies are also offering gas rewards. DoorDash announced this month that it will give drivers 10 percent cash back for gas purchased with the company’s debit card through at least April, company spokesperson Eli Scheinholtz said. Lyft will give 4 percent to 5 percent back on purchases made on its debit card through June, Macklin said. DoorDash’s and Lyft’s spokespeople declined to say what percentage of drivers have the debit cards.

But the half-dozen drivers interviewed for this article said that while such programs provide some relief, they find that the changes don’t go far enough to mitigate skyrocketing prices.

“It’s a gesture,” said Sam Vance, an Uber and Lyft driver who participated in a driver strike organized through social media on March 17 that was prompted by rising gas prices. “But it’s more performative than anything.”

Vance, 42, of Columbus, Ohio says a better system would be to pay drivers per mile, as Grubhub does. Hartfield of Uber said per-mile pay doesn’t always reflect cost because of differences in driving conditions that affect gas use, such as whether highways are part of a route. Lyft’s and DoorDash’s spokespeople didn’t specifically address that comment; Instacart didn’t respond to a request for comment about its decision not to use a per-mile rate.

Representatives of at least two ride-share companies said drivers are making more even when increased fuel costs are factored in. Macklin said Lyft drivers in the U.S. earn more than they did a year ago. Uber drivers are also earning more than historical trends, Hartfield said. Macklin and Hartfield didn’t respond directly to requests for comment about whether drivers’ earnings outpace inflation.

Unprecedented expenses

There are about 1.6 million “electronically mediated workers” in the U.S., which describes people who find and receive pay for short-term jobs through apps, according to 2017 data from the Bureau of Labor Statistics. But experts say estimates vary widely because people enter and exit the industry frequently.

The size of the workforce fluctuates even more during periods of uncertainty, they say, and rising gas prices could cause the biggest shakeup yet.

“Since the rise of the gig sector, we haven’t really seen this type of sudden increase in expense for these workers,” said Erin Hatton, an associate professor of sociology at the University of Buffalo who studies the gig economy. And that increase “could very well change the calculus of people’s decision to do this type of work.”

Gig jobs often attract workers who may be marginalized from working in traditional offices in some way, Hatton said. People with language barriers or health issues that make desk jobs uncomfortable are among those who are drawn to gig jobs because of their flexibility. But they are also likely to have a tougher time absorbing unexpected costs, she said.

There are two main types of workers: those who drive on top of other jobs for extra income and those who do it in place of full-time jobs, Hatton said. The former are more likely to sit out until gas prices come down, she said, because the latter don’t have many alternatives if they need money and driving is their only source of income.

One of those part-time drivers who is waiting until prices drop is Laban Cox, who has driven part time on and off for Lyft in Sacramento, California, since 2019. Even a 55-cent bonus won’t get him driving until prices drop.

“The price of gas exploding just completely deterred me,” said Cox, 31. “With where it’s at right now, it’s not feasible.”

Other reasons

Still, some drivers say the rising costs don’t outweigh the main benefits of such work, and companies haven’t yet reported a decline in the total number of workers. Neither Lyft nor Uber reported declines in the total numbers of drivers on the platforms in the last couple of months, their spokespeople said. They didn’t respond to questions about whether they have as many drivers as they would like.  

With a college degree and experience as a grocery store supervisor, Lea Williams thinks she could probably find work with more stable costs elsewhere. But Williams, a driver for DoorDash and Grubhub from central Illinois, said determining her own schedule and not having a direct, in-person boss is worth completing an extra delivery every time she works to offset her fuel costs.

“If it’s something that you want to do and you have your reasons for wanting to do gig work,” Williams said, “then I don’t think that you should let gas prices keep you from doing it.”