With gas prices surging, it’s not just airlines adding fuel surcharges — Uber is adding fuel surcharges as well.
In this post:
Details of Uber’s new fuel surcharges
As of Wednesday, March 16, 2022, Uber will be introducing fuel surcharges, with 100% of the additional fees going directly into workers’ pockets:
- Uber passengers will pay $0.45 or $0.55 in fuel surcharges per trip
- Uber Eats customers will pay $0.35 or $0.45 in fuel surcharges per order
These new fuel surcharges are temporary for at least the next 60 days, and will be reassessed after that point. The amount of the surcharges will be based on the average trip distance and increase in gas prices in each state.
These surcharges won’t be introduced in New York City. That’s because as of March 1, 2022, drivers in New York City received a 5.3% increase in the mandated minimum earnings standards. Furthermore, the vast majority of NYC delivery workers use bicycles, and not cars.
This seems like a fair development
With record high gas prices and drivers being on the hook for filling up their own tanks, it seems totally reasonable for some surcharge to be added to help drivers.
Airline fuel surcharges frustrate many consumers because they’re raised when gas prices go up, but then often aren’t lowered when prices go down, and they’ve become a permanent fixture of how airfare is structured. Of course there’s always the risk that we see something similar from Uber, though there’s no reason to believe (as of now) that this would happen.
In the case of Uber Eats deliveries, I do want to note just how many different fees there are on those now — in addition to the actual order amount and taxes, there’s now a service fee, delivery fee, fuel surcharge, and then there’s the tip. All of that also assumes you don’t pay the priority delivery fee, which I’ve increasingly found to be worthwhile (if I don’t want cold food to be delivered warm, or warm food to be delivered cold).
Bottom line
You can expect Uber rides and deliveries to get more expensive as of this coming Wednesday, as the company will be adding fees ranging from $0.35 to $0.55 per ride or delivery. This is to account for record high gas prices, and seems like a reasonable move.
What do you make of Uber adding fuel surcharges?
I don’t have a problem with the fuel charge for a Driver. But if they are delivering my food by bike or walking I don’t think I should be charged for fuel. They add the charge for all ways of delivery.
In most European cities, uber eats deliver by bicycles. Problem solved.
Some incorrect info. Just drove with an Uber driver to my destination in the last hour…
It’s not distance based, it’s a per trip fee. While the driver said that’s not great, he said it might be justified by the higher total trip earnings on longer rides.
100% of the fee goes to the driver, so relax, it’s not like an airline and their extra fees going to the corporate coffers.
That said, with current...
Some incorrect info. Just drove with an Uber driver to my destination in the last hour…
It’s not distance based, it’s a per trip fee. While the driver said that’s not great, he said it might be justified by the higher total trip earnings on longer rides.
100% of the fee goes to the driver, so relax, it’s not like an airline and their extra fees going to the corporate coffers.
That said, with current gas prices in CA, the driver said they will take take up to a 25% hit on earnings given current gas prices…all depending on how much they drive, car type, etc.
Like anyone else I don’t like to pay more, but fair is fair…again the fee goes 100% to the driver, and not to Uber, and they should not have to suffer from something out of their control.
First, I have no issue with a fuel surcharge in the current environment. There is no doubt that fuel prices are soaring. In fact, I am literally working today on a fuel surcharge program for my company that provides mobile-based services. But I must ask, why do you imply that it is ok to charge a surcharge for Uber drivers who will get the income to offset their fuel costs but it's not ok for...
First, I have no issue with a fuel surcharge in the current environment. There is no doubt that fuel prices are soaring. In fact, I am literally working today on a fuel surcharge program for my company that provides mobile-based services. But I must ask, why do you imply that it is ok to charge a surcharge for Uber drivers who will get the income to offset their fuel costs but it's not ok for the airlines? I get that a surcharge should have a transparent sunset and when that does not happen customers get agitated, understandably so. But why shouldn't an airline (or a bus company or a plumber) charge a surcharge regardless whether the proceeds flowing to the business if the flow is to the entity that covers the fuel cost?
As for California, I do sympathize with the worker on the ground who is trying to make a living (or pocket money or whatever his motive is), but in that state, the gas price situation is much worse than elsewhere, largely because of the politicians they have sent to Sacramento and the radical policies and taxes they have permitted. While I get that some did not vote for that, for those who did, I can't help but feel that some of the cost burden is just desserts for unwise electoral decisions. Maybe if they feel the pain for what they asked for, they will change and make better choices in the next election. I do not want any excessive harm on anyone for a bad vote - we have all made them - but failure to have any consequence from a bad decisions simply encourages the same behavior in the future.
Hi AG,
Thanks for the feedback, and it seems we are on the same page, it's just a semantics thing.
Fuel costs and surcharges are unfortunate but a reality for business these days. I have no issue if an airline (or other industry) applies a fuel surcharge, and it's fine if it goes to an airline's bottom line as they are the entity incurring the cost. Same for Uber drivers, as it's the drivers themselves...
Hi AG,
Thanks for the feedback, and it seems we are on the same page, it's just a semantics thing.
Fuel costs and surcharges are unfortunate but a reality for business these days. I have no issue if an airline (or other industry) applies a fuel surcharge, and it's fine if it goes to an airline's bottom line as they are the entity incurring the cost. Same for Uber drivers, as it's the drivers themselves who are incurring the cost. I made the point as some of the comments in the thread implied that Uber was just "enriching" itself with the surcharge (those are knee-jerk reactions), and that's not the case, as the money is 100% going to the drivers.
Take care.
How is 45 cents or 55 cents going to help the driver's gas bill? Even if you had ten trips in the day that is still equivalent to less than a gallon of gas.
Because the surcharge is not tied to your entire fuel cost. It is tied to your INCREASED fuel cost above some threshold where the surcharge is triggered. That being said, for a business where the distance of the drive is the entire point of the service with the base charge based on distance, it would make more sense if this surcharge were mileage based.
Or just cut the commission of Uber executives themselves; that would be better for both driver and passenger. Corporate executives just sit back and collect money, what do they contribute?
If it was not for them there would be no UBER
Ummm....managing the business. You do realize that businesses don't just exist with leadership and support roles don't you?
And we once thought Uber made cab fares fair and simple.
New Member here.
I agree with what others have said, you will most likely not see this rescinded once it's in place.
Much like destination fees, no liquids in your carry-on and masks.
Sorry, not true destinations fees are 100% given to us
That fuel costs haven't been incorporated in the pricing algorithm is more proof that profitability is never going to happen. Estimated trip duration, market wage, and fuel prices should be the basis of the pricing model but none are included.
How do know that? Nothing in the article suggests that fuel prices went into the base pricing. This is a SURCHARGE that is triggered when fuel costs rise above a certain level. It is in fact very likely that the pricing model incorporates the entire cost structure of the business, which would include fuel. (I work in pricing and corporate finance so I am not guessing here, though I have no specific knowledge of Uber.)
Nope I don’t agree in yet another stealth charge, I would much rather they just added an amount to the per mile rate. These charges never go away just like the resort fees and post covid recovery charges, it’s mission creep in the realms of financial activity.
In UAE Also pay fuel sarcharge
@Lucky - no, this is a terrible idea.
I doubt it will ever go away. And then there will be other fees added. (Resort, Destination, Arrival, Farting, Peak, Fuel, Rush Hour, etc.)
Yes, gas prices went up. And that is reasonable to be added in. But not as a fee. It is as simple as raising prices.
All fees should be banned. Raise prices instead.
So you think obscurity is better than transparency? If you see a single rate for a service, you have no visibility whatsoever into the underlying components of that price. If there total price is monetized as base fee but add-ons, you now know what a business is charging for. This makes it far easier to resist it in the marketplace. I assume you, the pricing department at Uber would probably much prefer to be as...
So you think obscurity is better than transparency? If you see a single rate for a service, you have no visibility whatsoever into the underlying components of that price. If there total price is monetized as base fee but add-ons, you now know what a business is charging for. This makes it far easier to resist it in the marketplace. I assume you, the pricing department at Uber would probably much prefer to be as opaque as possible as they arrive at your final bill. The fact that it is a line items is much more customer friendly.
Enter the "resort fee" - err, "destination fee".
Ubers that were $12-15 in 2019 are now routinely $25-39 in DC. This is just the latest "add insult to injury." They should be able to cover gas at $10 a gallon and still come out ahead with what they're charging lately.
Echo - Those cheaper earlier fares were signifcantly subsidized by billions of dollars in venture capital, which is no longer flowing in at the same rate.
Why is it even a surcharge, and not just built into the fares, which are dynamic in the first place? (I've always had the same issue with the airlines' approach.)
My guess is that the distinction/messaging is aimed towards the drivers. While it’s not noted as such above, the entire surcharge may go to the drivers.
These surcharges are way too low (for California especially). Should be $1/ride probably.
I don't have a problem paying a $.45 surcharge to an Uber driver, but I do have a problem with the inflation caused by the reckless policies of the Biden Administration.
All of this is so unnecessary, and is caused by Biden's war on energy.
Can't wait for the midterms!
Hi David. Could you name those exact Biden policies that are causing inflation? Has the administration taken over and started to fully control the global shipping markets and oil prices?
@Debo
Anything “global” implies weakness. America should be the world leader.
Biden shut down keystone XL. Re entered the Paris climate accord. We have enough oil in America to supply cheap gas to our fellow Americans for the next 100 years if we wanted to. The Keystone XL pipeline can be up and running again within a year. Biden is begging Iran for gas . Iran just attacked the US embassy in Iraq. Begging...
@Debo
Anything “global” implies weakness. America should be the world leader.
Biden shut down keystone XL. Re entered the Paris climate accord. We have enough oil in America to supply cheap gas to our fellow Americans for the next 100 years if we wanted to. The Keystone XL pipeline can be up and running again within a year. Biden is begging Iran for gas . Iran just attacked the US embassy in Iraq. Begging Maduro the murderous dictator of Venezuela for oil. OPEC no longer even takes his phone calls. How submissive of the current administration. Gas prices started going up as soon as Biden became President. Liars ! ! Nice suit by the way.
The United States produces enough oil to provide for all of our needs domestically, sure, but we are subject to world oil prices. Unless you are suggesting that we nationalize the American oil industry and/or set a price ceiling on oil, American oil producers will continue to sell to whomever pays them the most for their product. That's how markets work.
And don't forget the latest stories on how Wall Street doesn't want American producers to spend money on increasing production. They want dividends! It's how the market is working right now.....
We are subject to world oil prices, but why do you think they asked OPEC to increase production? To put downward pressure on prices through increased supply. Granted, it assuredly takes some lead time to ramp up our production, but adding our own supply to world markets would have the same effect. It probably would not reduce prices to where they were even six months ago, but it would pressure in the right direction. But...
We are subject to world oil prices, but why do you think they asked OPEC to increase production? To put downward pressure on prices through increased supply. Granted, it assuredly takes some lead time to ramp up our production, but adding our own supply to world markets would have the same effect. It probably would not reduce prices to where they were even six months ago, but it would pressure in the right direction. But Biden is too enamored with his "climate change" rhetoric on a future that may come to pass some day while average Americans are struggling with all-time high gas prices TODAY. They don't care about a 0.2 inch theorized rise in the sea level in 2075, they worry about paying their bills in March 2022. They need to remember this both in November 2022 and November 2024. Hopefully, they will realize that, while most of us are glad we don't have to deal with a toxic personality and mean tweets, the absence of those two things doesn't cover anyone's bills.
Lol you guys are hilarious. It’s the “we should be the world leader” attitude which causes many of the global problems - because so many different countries also think like that. You guys are 4% of global population by the way, you don’t have to be the leader
For all of America's sins and foibles, the world is still a better place with the United States as global leader and policeman. When the US retreats, other far worse powers fill the vacuum.
And what percentage of the global economy and security when the crap hits the fan? A LOT more than 4% in both cases.
The US only *maybe has enough oil in the ground for our own needs if you account for shale oil.
Shale oil is very expensive to extract, and only profitable when oil is over $80 or so per barrel. I'm sure you'll recall that the oil price spike of 2008 spurred shale exploration and extraction, which made OPEC fear North American energy independence, so they cranked up to drop the prices and squash the emerging competition.
Keystone XL "back up and running"? You know it was never running before, right? And given that your discussion is all about energy independence, what does a pipeline with Canada have to do with it? Canada's not domestic...
And we're not even going to war yet!!!!!
What do you think Ben ?
Some people are less fortunate and have to make money working for Uber . Then at the end of the day they pay $25 for gas and have depreciated the value of their car even further. Why would anyone have a problem with an Uber .45 surcharge when they don’t have a problem paying more for other goods with inflation ?
D3kingg totally agree... I actually it's a little low.
Fuel prices effect just about everything eventually...
Why would anybody pay for a service that rates the customer? Uber is not customer friendly, plus drivers always cancel the job if they do not feel it is worth it.
I prefer supporting American Cab firms with American drivers.
Thanks!
Less demand for more convenient Ubers for me!
Well, for one thing, in D.C., taxi cabs seem to have a routine of (trying to) scam their customers. Every so often I take a taxi instead of an uber/lyft if there's one that's convenient: I've had them try to charge me the snow emergency rate in July or just drive without the meter on, assuming I wouldn't notice.