Gas Prices Impact Food Delivery Workers

Gas prices continue to climb amid the ongoing conflict in Iran, putting additional pressure on gig workers who drive for food delivery services. A gas station in Los Angeles recently displayed prices exceeding $5 per gallon.

Independent contractors delivering for platforms like DoorDash, Uber Eats, and Grubhub must carefully manage their finances. Lee Dahl, a driver in Detroit, mentions that he tracks his earnings and expenses daily using a simple spreadsheet.

However, Dahl's calculations have been disrupted by the recent surge in gas prices. The national average for a gallon of gas was below $3 prior to the conflict, but it has now risen significantly. In his area, prices are nearing $4 per gallon, impacting his delivery strategy.

On Monday, DoorDash announced an 'emergency relief program' designed to alleviate the burden of high gas prices in the U.S. and Canada. This initiative, reminiscent of similar actions taken in 2022 after Russia's invasion of Ukraine, will offer drivers 10% cash back on fuel expenses through late April, with larger rebates for those driving more than 125 miles per week.

While some view this program as a welcome but limited relief, others like Dahl see it as minimal. He equates the incentive to earning a few extra orders each week. Kevin Hupe, another delivery driver from Vancouver Island, Canada, expresses concern about the cumulative effects of rising costs, including insurance.

Not all drivers are equally affected by increasing fuel prices. Those operating hybrid or electric vehicles are less impacted than traditional gas-powered car drivers like Hupe, who relies on a Honda CRV for deliveries.

For Hupe, driving is more of an optional earning opportunity, but for Dahl, who is 65 and relies on gig work to supplement his Social Security income, the increased costs have necessitated a change in strategy. He has begun to limit the miles he drives and has become choosier about which deliveries to accept.

Dahl now focuses on shorter runs and maximizing incentives offered by delivery apps. As a result, he reports boosting his earnings to over $20 per hour.

Hupe, on the other hand, only accepts orders that are either well-paying or nearby, preferring grocery shopping tasks that allow him to avoid excessive driving while still earning more.

The rise in gas prices coincides with a broader trend of decreasing pay for delivery drivers, driven by rising living expenses and increased competition, according to Ryan Green, CEO of gig worker analytics firm Gridwise. Despite high demand for food delivery services—especially among younger consumers—companies like DoorDash have reduced base pay, making tips increasingly vital.

Green notes that in 2021, DoorDash lowered its minimum base pay to $2 per order, igniting protests among drivers and highlighting the importance of tips, which now account for about 50% of delivery earnings. In contrast, rideshare drivers receive only about 9% of their total pay from tips.

While Dahl acknowledges the frustrations that may arise with customers, he maintains a positive outlook on his interactions. He views customers as allies, emphasizing the joy of providing them with convenience.

Despite the challenges, Hupe appreciates the flexibility of choosing his work hours. He questions how those relying solely on gig work manage under current conditions.