Can Uber and Lyft ever catch a break? Just when investors might have thought it was safe to wade back into the ride-hailing waters, thanks to the decline of Omicron, gas prices take off. That’s going to raise fuel costs for drivers—including those working for both ride-hailing services and food-delivery operations like DoorDash—probably causing some to quit. The result is likely to be higher prices for consumers, which won’t help growth.
Indeed, a spate of news reports over the past few days has spotlighted this very issue, suggesting that some drivers have already begun to quit because they no longer earn enough money to make it worth their while. The easiest way for the companies to respond is to increase driver incentives, but that raises their costs. For Uber and Lyft in particular, both of which are still burning through cash, paying more to lure drivers won’t appeal.