Rising gas prices threaten delivery services that have become a pandemic staple
Ricky Gardner has worked full time as a freelance food delivery driver for almost 10 years — longer than most major services have had a presence in the Triangle.
But soaring gas prices could force him out of the industry.
“Ask me in a week and I’ll let you know if I can keep doing this,” he said. “I think we’re going to be losing a lot of drivers who can’t afford to fill up.”
Average gas prices in North Carolina topped $4 per gallon this week for the first time in 14 years, as The News & Observer reported. Russia’s invasion of Ukraine has disrupted global oil prices as pandemic-crippled supply chains face further complications.
Fuel costs won’t stabilize any time soon, experts predict, and transportation services may suffer.
“Unfortunately this isn’t the end of seeing prices rise at the pump,” AAA spokeswoman Tiffany Wright previously told The N&O in a statement. “Sanctions and regulations against Russia have limited its ability to sell its oil on the global market, which has intensified global supply concerns in what was already a tight market due to the pandemic.”
Throughout the COVID-19 pandemic’s undulating presence over the last two years — oscillating between hard lock downs and optimistic reopenings — home delivery services have kept many small businesses afloat. Companies such as DoorDash, Grubhub, Uber Eats, Postmates and Chapel Hill-based Takeout Central connected restaurateurs with their customers when in-person interchange was frowned upon or banned.
Such operations are still booming despite lifts on restaurant capacity limits, but rising gas prices could thin the driver pool. Gardner — who spent about eight years with Cary’s 919 Dine before joining Takeout Central — said fuel costs whittle away at drivers’ bottom lines.
“It’s going to hurt us,” he said. “If the company paid for gas it’d be a different story, but we do. So it’s coming out of my income.”
Uber Eats driver Malaysia Odom echoed Garner’s sentiment.
“It hurts because you’re using the money you make today to put gas in your car for tomorrow,” she said.
Several companies told The News & Observer they’re investigating ways to retain their workers, perhaps raising delivery fees and other costs to forestall the looming driver shortage.
“With gas prices as high as they are, every dollar counts,” said Zach Greenberger, head of strategic business development and global supply management at Lyft.
Takeout Central spokesperson Sarah Lynn said the company hopes to shore up driver income, even if service costs increase.
“We’re currently drafting up a longer-term plan to help sustain drivers while gas prices are inflated, which may include temporarily increasing our delivery fee, which always goes 100% to drivers,” she said. “We want to best support our loyal drivers without putting the burden on customers, so the first step we’re taking is giving a bonus immediately to our consistent drivers who are suffering the most from rising prices. This is coming straight from Takeout Central and is effective this week.”
Lyft, an app-based taxi and food delivery service, is enacting new rewards programs to save drivers money.
“We care deeply about the driver experience and we’ve taken concrete steps to help, given rising gas prices,” said company spokesperson C.J. Macklin. “Our investments in programs like our GetUpside partnership and the Lyft Direct cash back debit card are designed to directly save drivers money at the pump. We’ll continue to explore other ways to help the driver community.”
Doordash spokesman Eli Scheinholtz said “dashers,” the company’s drivers, have always earned 2% cash back at the pump and can access discounted maintenance services for their vehicles. He did not indicate whether the company had immediate plans to adjust driver compensation in response to increasing fuel prices.
“But as much as we fill up, it’s getting to be hard to see the profit,” said Gardner, who refills his tank every two days on average. In the past, it cost him about $150 a week. That expense could nearly double as prices trend toward $5 per gallon.
“So I don’t know — does that mean people will be getting their stuff slower because there aren’t as many drivers?” Gardner said. “I don’t know, maybe. But I know it’s another annoying way that everything is costing too much money these days.”
This story was originally published March 9, 2022 at 1:44 PM with the headline "Rising gas prices threaten delivery services that have become a pandemic staple."
