Uber is adding a “temporary fuel surcharge” to fares

Rising ride fares despite shifting to electric vehicles
Uber fares are going to increase despite using electric vehicles

Uber is adding a temporary “fuel surcharge” to its ride fares so that drivers can keep up with the record-high gas prices in the US. The surcharge will be sent to the drivers and it applied for the next 60 days. It is expected to be a value of $0.45 or $0.55 on each Uber trip. Further adds that “we will continue to monitor gas prices and may make additional changes.”

Uber is adding a “temporary fuel surcharge” to fares
Image credits- Singularity Hub

Winship cautions that “we will continue to monitor gas prices and may make additional changes.” And this temporary fuel surcharge will even be in place for rides or deliveries done in an EV, “which we hope will serve as an additional incentive for drivers to transition to EVs going forward,” Uber spokesperson Harry Hartfield said. Winship listed some of Uber’s electric vehicle benefits, including higher earnings for drivers who use battery EVs, a $6,000 discount off a Nissan Leaf, and discounts on some vehicle charging. But a fuel surcharge and EV benefits may not be enough to fully prevent the sting of higher gas prices. As my colleague Andy Hawkins wrote today, EVs are still out of reach for many because of things like supply chain constraints, low inventory, and expensive prices. And because there are many reasons that gas prices have increased, including Russia’s invasion of Ukraine, they could stay high for some time.

Shifting to EV

With gas prices soaring above $4 a gallon, electric vehicles are starting to look a lot more attractive to car buyers. But a combination of supply chain constraints, the global chip shortage, higher-than-average prices, and low inventory at dealerships will conspire to keep EVs out of reach for most people. EV sales have increased exponentially year-over-year, but they still account for only 4.5 percent of new cars sold in the US. The average sale price of a new EV is still about $10,000 more than the overall industry average that includes gas and electric cars. In terms of pricing, an EV is the equivalent of an entry-level luxury vehicle.

The last time gas prices exceeded $4 a gallon, during the financial crisis of 2008, demand for huge vehicles cratered. More car buyers turned to fuel-efficient vehicles, and some stopped shopping altogether. The increase in Uber prices despite using electric vehicles is more or less connected to the increasing EV sales. Unlike how experts predicted, using EVs will be beneficial for the environment, continuing to have high prices.