Uber charges higher prices in metropolitan area due to high gas prices

Uber charges higher prices in metropolitan area due to high gas prices

Uber charges higher prices in metropolitan area due to high gas prices

  • This is one of the first recent examples of fare prices rising in a specific location to offset gas prices.
  • Higher fares replace a fuel surcharge that Uber had introduced for drivers with shared rides.
  • According to an Uber spokesperson, prices had not grown with other cities.

Uber is raising the price of rides in a major U.S. city to help drivers deal with skyrocketing gasoline prices, according to a leaked memo.

The pay increase for shared-ride drivers, confirmed by an Uber spokesperson, only applies to those who work in the Phoenix area. Drivers in other regions will still receive a fuel surcharge of 45 to 55 cents that the company introduced in the spring. But as Uber explained to drive


Hail

drivers in the memo, the fuel surcharge in Phoenix alone proved insufficient as fare prices lagged behind other markets.

“We’ve heard from you about the need for further change,” Uber wrote in the update sent to drivers recently. “This week we are replacing the fuel surcharge with higher rates in Phoenix.”

Uber’s move is the last one taken by the


gig economy companies

to address the pain caused by gas prices across the country. The average price in the US is $5 a gallon, up 12% from a month ago, according to AAA. In the Phoenix area, the average is $5.69, according to the Auto Club.

The companies have been trying to get to the bottom of how generous they can be with their drivers on this front, while trying not to hurt rider demand or their own profits. Last month,


UberEats

and DoorDash announced they would be reversing some of their fuel subsidies. Uber Eats will stop paying delivery drivers an extra 45 cents per ride; DoorDash discontinued a program that gave drivers a weekly bonus if they drove a certain number of miles during the week.

Adrian Schabbing, 22, an Uber delivery man and driver from Arizona, said soaring fuel prices, especially in recent weeks, have weighed on his earnings. He drives part-time for Uber, usually during rush hour Friday through Sunday.

Last week he spent $65 to fill his Ford Focus. That’s about $25 more than before gas prices started rising. “Gas prices here have risen 40 cents in the past two weeks. And that’s true, of course,” he said when calculating his earnings.

Drivers in other regions who spoke to Insider said their weekly profits have fallen as rising fuel costs sap their earnings, which were relatively flat.

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