Drivers for ride-hailing groups Uber Technologies Inc (NYSE:UBER) and Lyft Inc (NASDAQ:LYFT) have seen a significant impact on their earnings as a result of the sharp spike in petrol prices following Russia’s invasion of Ukraine.
The US is considering an import ban on Russian oil, which has led to a surge in crude prices.
The soaring oil price has trickled down to petrol pumps at a “staggering” pace, Patrick DeHaan, head of petroleum analysis at Gasbuddy, told Bloomberg.
Higher fuel costs are significantly cutting into drivers’ earnings and are making some drivers question the sustainability of the Uber model.
“Our platform only works if it works for drivers, so we’ll continue to monitor gas prices and listen to drivers over the coming weeks,” an Uber spokesman told Bloomberg.
Uber and Lyft both have partnerships with the rewards platform GetUpside, which offers drivers cashback for petrol purchased at participating garages.
Meanwhile, a petition calling for ride-hailing apps to help drivers with fuel costs has gathered over 5,500 signatures.
Ride-hailing apps were struggling with a shortage of drivers after customer demand rebounded when pandemic restrictions were lifted, leading to longer waiting times and higher fares for customers. Companies then introduced incentives and bonuses to attract drivers, which has improved supply, Bloomberg reported.
However, the spike in petrol prices could cause further uncertainty just as workers return to the office following further easing of COVID-19 restrictions.
On Monday, Uber upgraded its profit guidance for the current quarter on the back of rising demand for rides.