Uber’s fare hikes may not be enough to calm drivers’ anger over fuel costs

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Uber’s price hikes in the face of mounting fuel costs across Europe might not be enough to stave off drivers’ anger — and it might give them another reason to fight for employee status.

The fallout from Europe’s sanctions against Russia has left the Continent scrambling to adjust to soaring fuel prices, affecting sectors ranging from logistics to the commercial airline industry. Drivers for ride-hailing apps like Uber, Bolt and FreeNow are in a particularly precarious position: While the companies can hit consumers with a surcharge, their drivers are dependent on the platforms to set prices when a passenger books a ride.

That price-setting balancing act requires ride-hailing platforms to compensate for higher fuel costs and keep their drivers roaming the streets while staying competitive enough to not push passengers away. The stark reminder that platforms, not drivers, ultimately control pricing may also compel drivers to fight harder for recognition as employees instead of self-employed contractors.

In the U.S., Uber came out early in support of drivers facing higher fuel prices. On March 11, Uber announced it would introduce a fuel surcharge of $0.45 or $0.55 on each Uber trip — depending on the location — and claimed that “100% of that money [was] going directly to workers’ pockets.” Uber emphasized in the statement that the price hike was “temporary” and would be reassessed in 60 days.

Delicate maneuvering

Compared with its actions in the U.S., Uber has been less vocal about its pricing policy in Europe — but fares have been raised in multiple countries, it confirmed to POLITICO. The European countries where Uber has increased prices are France, Germany, Spain, the Netherlands, Portugal, Poland, the Czech Republic, Poland and Romania. In the United Kingdom, fares went up as well recently, but due to a change in the contracting model. Unions have also reported price hikes in Belgium.

While it has introduced set fuel surcharge prices in the U.S., Uber’s approach in Europe involves raising the so-called base fare to varying degrees. These hikes take into consideration drivers’ operating costs and the different earnings they make in each country, based on Uber’s competitors and requirements to operate that are different in every country. The base fare is the minimum amount a driver gets, regardless of how high or low demand is at any given time. (Uber introduces “dynamic pricing” in times of high demand).

“In many cities across Europe, we have increased Uber prices to help drivers with the recent spike in operating costs,” an Uber spokesperson said — adding that elevated prices will be presented to passengers upfront: “As always, riders will get a trip price before booking their journey.”

Pricing policy is, however, a delicate matter. Both drivers and passengers can easily hop to a competitor’s app, like that of Estonia’s Bolt, if they don’t like the suggested price. But Bolt faces the same issue as Uber when it comes to balancing its prices. The taxi industry, public transport and e-scooters are other competitors Uber has to factor into its pricing decisions.

Bolt said in a statement shared with POLITICO that it’s “currently reviewing” its pricing to ensure it represents “a fair reflection of costs being incurred” by drivers.

There are other, less contentious ways to soothe drivers’ pain than raising fares, such as cutting deals with gas stations for fuel discounts or making electric vehicles more affordable for drivers. Bolt, for example, set up loyalty programs at Circle K gas stations to help keep fuel and car maintenance prices in check. Meanwhile, Uber has a war chest of $800 million to get drivers to electric vehicles by 2030, offering vehicle-purchase assistance and incentives for those driving with electric vehicles.

A perfect storm

Even though platforms are attempting to mitigate the damage from spiking fuel prices, it might still influence an already imminent showdown over drivers’ employment status.

Rising fuel costs could give drivers’ lobby groups fresh ammunition in their fight to secure more rights, or even full employment status, for platform workers. The App Drivers and Couriers Union (ADCU) staged a protest for food delivery couriers in Belfast two weeks ago, referring to high fuel prices as part of a “perfect storm” faced by drivers. Among the protest’s goals was securing a minimum income for drivers.

Elsewhere in Europe, drivers’ representatives also claim that platforms’ efforts are not enough, and are demanding that governments step up to support workers.

“The increase is so brutal that we don’t succeed in reaching a profit,” said Fernando Redondo, chair of the Association Belge of Limousine Drivers (ABCL). Redondo has sided with Uber in the past amid the platform’s legal troubles in Brussels. “We ask [for] support from the [Belgian] state, from the region, to help us with fuel [price] increases, even as platforms have done a very, very, very small effort.”

The request for government support comes at a time when platform workers’ fates are already under scrutiny, both in capitals across the bloc and in Brussels. EU lawmakers are gearing up to start the work on the EU’s platform work directive, presented in early December, that could reclassify up to 4.1 million workers as employees instead of self-employed contractors.

Control over a worker’s remuneration is one of the five criteria to determine if a platform worker is in fact an employee. As drivers are reminded that it’s Uber, and not them, that decides the price of a ride — and as such, how much financial relief they get — they might turn up the heat on the platform work initiative, aiming to secure the same rights and conditions as employed workers.

“How do we have to regulate platforms?” is the question governments face, said Brahim Ben Ali, secretary-general of the INV union in France. “We can’t leave it like that, that’s just not possible. They have created a form of [anti-social work]. We are a democratic country, a social country. And today, we do the opposite. That’s just not possible.”

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