Uber, Lyft drivers switch to Teslas as gas prices rise
Some Uber and Lyft drivers are finding that renting or buying a Tesla, the luxury electric car, is a more profitable option now amid soaring gas prices that have upended the economics of gig work.
Last summer, Heidi Barnes, 34, thought about upgrading her beloved 2009 Toyota Camry, which she nicknamed “The Beast,” for a sleek Tesla Inc. Model 3 sedan. The Lancaster-based driver never imagined that the high-end vehicle would become less of a splurge and more like a last resort until the average price for a gallon of gas in the U.S. surpassed $4 for the first time in March.
Almost overnight, a full tank went from costing Barnes roughly $60 a day to more than $100, making it harder to make a decent profit from ferrying passengers around Los Angeles County.
“It was a huge push to get in a Tesla sooner rather than later,” Barnes said.
Barnes opted to rent a standard Tesla Model 3 for a month through Hertz, which has a deal with Uber Technologies Inc. offering drivers a weekly rate of $344 that includes insurance, basic maintenance and unlimited miles.
Even after accounting for the cost to charge the car, Barnes was paying roughly $450 a week for
“the car of her dreams,” less than the nearly $600 required to fuel her Camry. In her first week, Barnes' earnings covered the cost of the rental for the month. Her new ride is also a hit with passengers.
“They're a lot more generous,” Barnes said. “Usually I'm lucky to get $1 to $3 tips but it's now $10 or $15, sometimes consecutively.”
In total, she netted over $2,600 during her 25-day rental, more than double the $800 to $1,000 she typically made from driving the “Beast,” according to screenshots of earnings she provided to Bloomberg.
This month, the national average for a gallon of gas topped $5, an all-time high since the American Automobile Association began collecting pricing data in 2000. As prices continue to climb, the difference between gasoline-powered cars versus electric is only becoming more stark.
For drivers who have seen their take-home pay whittled down, the switch isn't just skimming a few dollars from expenses; it's a lucrative earnings opportunity.
According to Gridwise, an app that helps gig workers manage their trips, the number of ride-share and delivery drivers who opted to hop behind the wheel of a Tesla jumped 186% in May compared with last June. The Tesla trend also comes at a time when Uber and Lyft Inc. are on the hook to show progress toward achieving their goal of switching entirely to EVs in Europe and North America by 2030.
Uber offers an additional $1 per ride to drivers who switch to an EV, which can earn them up to $4,000 a year under the company's Green Future program. Last month the San Francisco-based company revamped its driver app with an “EV hub” that features a charging map and made rides in EVs a premium option for passengers. Lyft, meanwhile, offers no financial incentives for drivers to switch to EVs.
Since launching its partnership with Hertz in November, Uber has seen more than 15,000 drivers rent a Tesla.
“Participation has been really compelling,” Adam Gromis, Uber's public policy manager for sustainability, said in an interview. “Drivers are smart, and they know how to maximize their take-home pay.”
Uber has about 1 million Uber drivers in the U.S., according to The Rideshare Guy, a website dedicated to the ride-share industry. At Lyft, growth of electric vehicles on the platform is at record levels, a spokesman said, and there has been a 27% increase in EV use since the first quarter. While Teslas are the dominant EV used by Lyft drivers, the company is also seeing significant growth from other manufacturers, particularly Kia Corp., he said.