Corporate changes and rising gas prices are squeezing the margins of Ithaca-area Uber drivers. Despite company policies designed to protect the profits of new, low-earning drivers, for some, the job is becoming unsustainable.
Recent legal changes — including a 2020 ruling that entitled Uber drivers to unemployment benefits, and laws making New York Uber drivers employees rather than contractors — have benefited drivers. Their previous classification as contractors denied drivers post-termination benefits and a guaranteed minimum wage, which were both addressed in the ruling.
However, a sharp increase in gas prices due to global conflicts have raised the cost of driving for all car owners. Uber’s previous measures — including their recent imposition of a 55 cent surcharge on all rides — haven’t been enough for Ithaca drivers.
Robert G., a driver for Uber, who asked to remain anonymous due to the sensitive nature of his comments, has been working for the company since October. He described his experience as a daunting one. For him, breaking even as an Uber driver is no longer an option some days.
“Even if I take 40 rides in a week [with the 55 cent surcharge], I will only receive $20 from Uber — I spent $50 on gas today already,” Robert said.
On the day he spoke to The Sun, Robert said he had been driving since 8 a.m. and by 8 p.m. had already driven to Syracuse Hancock International Airport three times, with no intention of stopping until he met his 12 hour driving cap.
Another driver, Jeffrey Thomas, said his experience as a driver was difficult but made easier by Uber’s “guaranteed minimum” program, which reimburses the first 75 rides for new drivers who make less than $300 in a given week. However, Thomas said that driving might become economically unsustainable for him after the reimbursement program expires and could restrict his driving range.
“Once I begin to drive more frequently [after the guaranteed minimum bonus has expired], it is going to be hard for me to balance the cost. I live in Cortland, and it may not be worth the cost in gas to come to Cornell anymore,” Thomas said.
Many Uber drivers in Tompkins County depend on the student bodies at Cornell University and Ithaca College for customers. With a larger fraction of drivers’ profits going toward gas expenses and Uber, driving more frequently can be an economic burden rather than a boost. “I can’t really afford the expensive trips to the airport anymore. I just try to stay local, but driving around Ithaca can still get expensive for me,” said Kathy Wallace, a driver of three years from Lansing, N.Y.
Uber drivers are still not entirely disappointed with their employer. From interviews with thirteen drivers across the Tompkins County area, drivers were broadly appreciative of other benefits Uber provides, including car coverage and bonuses for meeting certain milestones.
Robert G. happily explained the great insurance benefits associated with his job saying, “If I got hit while driving with you in my car, with the coverage from Uber and my insurer, you would receive a good sized check and I would receive a new car!”
However, many drivers feel that these benefits haven’t offset increased gas prices, leaving Uber drivers seeing their employer as better than the competition but still not good.
“They have better perks than most companies, unlike Lyft, but neither are great. Here we can get car detailing for customer accidents, and partial coverage if we get into a car wreck, but their slow response to gas prices means that I have to save less for other expenses to my car,” Thomas added.
Without a net profit after the introduction of a flat-rate gas surcharge, and with the guaranteed minimum varying among drivers, most see no incentive to continue driving until gas prices decrease.
“After my brakes went out in NYC, I couldn’t handle driving to the city for the better paying jobs. I am driving a rental right now, because my insurance paid for it, but once I get my car back Uber money won’t be able to pay for my car anymore” said Joseph Orttis, an Ithaca native and driver for two years, who frequents New York City for customers’ rides.
When asked how he would supplement his income without Uber, Orttis replied that he would probably have to return to working at the grocery store Wegmans.
The move away from Uber driving is having an effect. The United States has seen an overall drop in available drivers, and prices have risen from $2.84 to $4.20 in a single year in upstate New York. In response, some drivers are calling for measures to increase drivers’ wages — such as a gas tax per mile driven and a decrease in the percentage cut taken from each ride by Uber — and have responded negatively to Uber’s lack of action on those demands.
“Uber isn’t taking the extra cost out of their pocket, they are putting it onto us,” said Gaston Heinrich, a long-term Uber driver who recently relocated to Cortland, N.Y. “I have not turned a profit [recently], and Uber has not decreased their [percentage] cut from each ride.”