As the war in Iran continues, Americans face increasingly high gas prices — a situation that's having a disproportionate effect on gig workers including rideshare drivers, food couriers and grocery shoppers.
As fuel costs have climbed to an average of $4 per gallon (1) across the US, app-based contractors are seeing their profit margins tighten. They can't raise the price of their services, so gig workers have to get creative to combat the rising costs of their trade.
Los Angeles rideshare driver Alvaro Bolainez told CNBC that gas prices jumped so fast it's "insane," forcing him to avoid shorter rides to maintain profits as unleaded gas rose 22% in a single month (2).
Why gas prices are on the rise
The main driver of the fuel crisis is the closure of the Strait of Hormuz – a narrow waterway located between Iran and Oman, where roughly 20% (3) of global oil traffic passes.
The war led to a halt in vessel traffic in the area as Iran took control of the Strait, resulting in an increase in benchmark oil prices, thus leading to a rapid rise in prices at the pump. Now, in the midst of a fragile ceasefire between the US, Israel and Iran, President Trump has announced a US naval blockade (4) of Iranian ports in the Strait, designed to put pressure on the country to accept terms for a longer lasting peace plan. This is also putting further pressure on oil prices.
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How rising fuel costs impact gig workers
"As gas prices increase, the income of the worker immediately decreases because the apps do not immediately adjust the income to account for the increased cost of performing the task," Eric Kingsley, an employment lawyer who has watched the rise of the gig economy for more than 30 years, told Moneywise. "The increased cost of gas puts the entire burden on the worker."
But given the challenging job market, (5) particularly for young people, many gig workers face a dilemma: pay the higher price at the pump or stop earning altogether, as other opportunities may be limited.
This has left some independent contractors – including Bolainez – feeling trapped. "We have no choice," he said. "If we don't drive, we won't be able to afford to pay rent or pay bills."
How to save on the cost of gas
Rideshare services including Uber (NASDAQ:UBER), Lyft (NASDAQ:LYFT), Instacart and DoorDash have offered some relief for their drivers, (6) such as a percentage of cash back on gas purchases and even grants for workers who consider switching to electric cars. But some drivers say it's not enough or that the process isn’t something they want to deal with. Margarita Penalosa, a Los-Angeles based Uber and Lyft driver, told the New York Times, "They're not giving us anything extra" and says she isn't interested in opening a new debit card just to get cash-back rewards.
That said, the following tips can help gig workers – and anyone else who spends a lot of time on the road – save on the cost of gas:
- Be selective: Not every gig is worth the gas. Before accepting a delivery or a ride, calculate the cost per mile to make sure it's worth your time.
- Optimize routes: Use navigation apps to batch deliveries or map the most direct path between stops. Avoiding heavy traffic and reducing total miles will keep more money in your pocket.
- Look for deals: Use apps like GasBuddy and Gas Guru to find the lowest gas prices in your area.
- Leverage rewards: Use gas and grocery loyalty programs or platform-specific fuel cards to stack discounts.
- Drive safely: Rapid acceleration and hard braking can lower your gas mileage by as much as 40%. (7) Maintain a steady pace to keep your engine running efficiently.
- Check your tire pressure: Keeping your tires at the recommended pressure can reduce rolling resistance and improve your gas mileage (8) by up to 3%.
- Lighten the load: Remove empty roof racks or heavy cargo carriers to reduce weight and wind drag, which can also impact fuel efficiency.
- When possible, use a bike instead of your car to make deliveries. Also consider switching to an electric car if that is doable for you and your lifestyle.
While you can't control global oil markets, you can control how much fuel your vehicle consumes. Whether you're delivering groceries or driving for a rideshare app, these small adjustments can add up to real savings.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
AAA (1); CNBC (2),(5); NPR (3); The New York Times (4),(6); U.S. Department of Energy (7),(8)
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Katie Ziraldo is a writer who specializes in simplifying complex topics to create educational content for readers at all knowledge levels. She first discovered her passion for financial content as a writer for Rocket Companies, where she represented brands including Rocket Mortgage, Rocket Homes and Rocket Money. Her portfolio of work also includes bylines in The Detroit Free Press, HuffPost and LendingTree. Driven by the desire to guide readers through life’s most complex financial moments, Katie has written hundreds of personal finance articles, with topics ranging from mortgages to personal loans, credit cards and insurance.
