Surging Gas Prices Upend Economics of Gig Work

With WTI crude oil above $114 per barrel as of early April 2026 — up 86.7% year-over-year — and regular gasoline topping $4 per gallon nationally for the first time since 2022, millions of Americans who drive for a living through app-based platforms are confronting a financial squeeze with no clear relief [1][2]. The Consumer Price Index for gasoline rose 18.9% year-over-year to 328.9 in March 2026, driven largely by supply disruptions near the Strait of Hormuz that have affected roughly 20% of world oil supply [3][4].

For gig drivers — the Uber operators, DoorDash couriers, and Instacart shoppers who form the backbone of America's on-demand economy — every cent at the pump translates directly into lost income. Unlike salaried employees who commute once to an office, these workers rack up hundreds of miles per day, and their platforms provide little insulation from fuel volatility.

Source: BLS / Bureau of Labor Statistics

Data as of Mar 1, 2026CSV

The Per-Mile Math: When Costs Exceed Reimbursements

The IRS set the 2026 standard business mileage rate at 72.5 cents per mile, up from 70 cents in 2025, reflecting rising fuel costs, vehicle depreciation, and insurance premiums [5]. That rate is designed to cover all vehicle operating expenses — gas, oil, maintenance, insurance, depreciation, and registration — and serves as the basis for gig workers' tax deductions.

But the IRS rate is a tax deduction, not a reimbursement check. Platform pay-per-mile rates are far lower. DoorDash's base per-mile pay has hovered around $0.21 per mile in many markets [6]. Uber and Lyft set per-mile rates that vary by city but frequently fall in the $0.60 to $1.00 range for the total fare — of which the driver receives a portion after platform fees [7].

The fuel cost alone tells a clear story. A driver operating a vehicle with the median fuel economy of approximately 25 MPG at $4.00 per gallon pays roughly $0.16 per mile in fuel costs [8]. At $4.50 per gallon — already a reality in California and several Northeast states — that climbs to $0.18 per mile. One gig driver tracked by Giglytic discovered his real-world fuel cost was $0.19 per mile rather than his estimated $0.12, because stop-and-go traffic, restaurant idle time, and cold starts degrade efficiency well below EPA ratings [8].

When total operating costs are calculated — fuel, depreciation, insurance, and maintenance — industry analyses estimate actual per-mile costs between $0.40 and $0.70 for most gig vehicles [9]. For drivers with older, less fuel-efficient vehicles getting 20 MPG or less, fuel alone can consume $0.20 or more per mile, and total costs approach or exceed the IRS standard rate.

The threshold where the math turns negative depends on the vehicle. For a 25 MPG car, gas prices above roughly $4.25 per gallon push fuel costs past $0.17 per mile — still manageable in isolation but consuming a larger share of per-trip earnings. For a 20 MPG vehicle at $4.50 gas, fuel costs hit $0.225 per mile. When combined with depreciation of $0.15-0.20 per mile (for vehicles driven 30,000-50,000 miles annually, which lose $6,000-$8,000 in value per year), insurance, and maintenance, total costs can exceed $0.60-0.70 per mile — leaving drivers with single-digit net hourly earnings on shorter deliveries [9][10].

How Many Drivers Are Affected

According to the Federal Reserve's 2025 Survey of Household Economics and Decisionmaking (SHED), 20% of U.S. adults performed gig activities in the prior month [11]. Of those, 4% used platform apps for vehicle-based tasks like ride-sharing, and 9% performed delivery or similar short-term work. Twenty-one percent of gig workers considered it their primary employment [11].

A separate TransUnion survey from fall 2024 found that over one-third — 37% — of gig workers relied on gig work as their primary income source, with driving for a ride-sharing service (23%) and driving for a restaurant delivery service (19%) ranking as the top two gig activities [12]. Goldman Sachs research placed the primary-income figure lower, at 15%, highlighting how different survey methodologies and definitions of "primary" produce varying estimates [13].

The distinction matters because the economic pain distributes unevenly. The Fed's data shows that 96% of gig workers spent fewer than 35 hours per week on gig activities, and 70% spent fewer than 5 hours per week [11]. For the majority who treat gig work as an occasional supplement — picking up a few DoorDash deliveries on weekends — higher gas prices reduce a modest income stream. For the 15-37% who depend on it as primary income, the same price increase erodes the wages that cover rent and groceries.

Source: FRED / EIA

Data as of Apr 6, 2026CSV

Net Pay After Expenses: The Take-Home Reality

After accounting for fuel, depreciation, insurance, and maintenance, the actual take-home pay for gig drivers typically falls to $10-18 per hour, according to multiple industry analyses [9][10]. Real earnings per hour run 40-60% lower than the gross figures platforms advertise.

The JPMorgan Chase Institute tracked payments through 128 online platforms to 2.3 million families and found that average monthly earnings for transportation-platform workers fell from $1,469 during active months in 2013 to $783 in 2017 — a decline that predated the current fuel spike and reflects both increased driver supply and lower per-trip payouts [14]. Among those who earned through transportation platforms, 58% had earnings in just three or fewer months of the year, suggesting most participants treated it as sporadic work rather than a career [14].

The federal minimum wage remains $7.25 per hour. State minimum wages range higher — $16.50 in California, $16.00 in New York — but gig workers classified as independent contractors are not legally entitled to minimum wage protections in most jurisdictions [15]. Whether net gig earnings of $10-18 per hour exceed minimum wage floors depends heavily on location, vehicle costs, and hours worked. In high-cost states with higher minimums, many full-time gig drivers earn net pay that sits at or below the state floor.

Rideshare customers paid nearly 10% more in 2025 while platform fees per trip jumped over 33%, but driver gross pay per trip and per hour increased just 3.6% and 4.1% respectively [16]. The gap between what riders pay and what drivers earn has widened, with platforms capturing a growing share of each transaction.

Platform Responses: Surcharges, Cashback, and the 2022 Precedent

In 2022, when gas prices last spiked above $4 per gallon, both Uber and Lyft introduced a $0.45-0.55 fuel surcharge per trip, with 100% passed to drivers [17][18]. That surcharge added a small but meaningful buffer.

In 2026, the platforms have taken a different approach. Rather than reimposing surcharges, Uber is offering $1 off per gallon through a partnership with the cashback app Upside, plus 5% cashback on its Uber Pro debit card [4]. Lyft provides up to 2% cashback through its Lyft Direct card [4]. DoorDash offers 10% cashback on gas purchases via its Crimson card, plus a weekly gas bonus of $5-15 depending on miles driven [19].

These programs are less direct and less generous than the 2022 surcharges. A driver filling up a 14-gallon tank saves $14 with the Uber-Upside deal per fill-up — meaningful but modest against monthly fuel bills that full-time drivers report have risen $50-100 per month in early 2026 [1]. The DoorDash cashback on a $60 fill-up amounts to $6. Neither offsets the scale of the price increase.

CNN reported in April 2026 that rideshare drivers were "on the brink of quitting" as companies declined to reinstate surcharges [17]. The platforms' reluctance to add surcharges a second time reflects a tension: surcharges reduce consumer demand, which reduces trip volume, which can hurt driver earnings on the other side of the equation. Platforms appear to have calculated that cashback perks — funded partly by partner companies and card interchange fees — are less likely to suppress ride requests than visible per-trip price increases.

Are Drivers Leaving or Absorbing the Hit?

Critics of the gig-worker grievance narrative argue that drivers are independent contractors who accepted known cost variability and can stop working when margins turn negative. The data tells a more complicated story.

Approximately 97% of new Uber drivers quit and move on to other jobs over the life of their engagement, with only 3% continuing after one year [20]. More recent data from Gridwise shows about 41% of Uber drivers who started between July and September 2025 were still on the app six months later [20]. Driver turnover has always been high, but the current churn reflects both dissatisfaction and the ease of entry — platforms continuously onboard new drivers to replace those who leave.

The pattern is not simply workers rationally exiting when margins drop. Roughly one in five workers who lost jobs or took pay cuts in 2025 turned to gig work [20]. As the broader labor market softens in some sectors, gig platforms absorb displaced workers who may have few alternatives, even if per-mile economics have deteriorated. Platforms benefit from oversupply — more available drivers means shorter wait times for customers — while individual driver earnings fall because trips are distributed across more workers [16].

Workers also cite factors beyond pure economics keeping them on platforms: flexibility around childcare or other jobs, lack of credentials for other employment, and sunk costs in vehicles purchased or leased for gig work [20][21].

Who Gets Hit Hardest

The financial impact of fuel price spikes falls disproportionately on specific demographic groups. The Federal Reserve's SHED data shows that lower-income workers are more likely to engage in gig labor: 25% of adults with household income below $42,000 participated in the gig economy, compared to 13% of middle-income earners [22]. Hispanic adults (24%), students (30%), and parents of young children (26%) participate at above-average rates [11].

Gig workers as a group show weaker financial positions than non-gig workers: only 65% reported doing "okay" or "living comfortably," versus 75% of non-gig workers. Just 50% had three months of emergency savings, and 24% lacked health insurance [11][22].

The vehicle itself becomes a dividing line. Drivers who can afford fuel-efficient hybrids or EVs — a Toyota Prius averaging 50+ MPG pays roughly $0.08 per mile in fuel at $4 gas, and an EV driver pays $0.03-0.05 per mile in electricity — are far more insulated [9]. But EV and hybrid purchases require upfront capital or creditworthiness that lower-income gig workers often lack. The workers most concentrated in gig driving — those with household incomes under $42,000 — are also least likely to own fuel-efficient vehicles, creating a feedback loop where the cheapest cars to buy are the most expensive to operate.

Immigrant workers make up a significant portion of the gig driving workforce. A study in the International Migration Review found that 18.5% of immigrants did gig work [22]. In cities like New York, immigrant drivers have historically dominated the taxi and rideshare workforce. Many face additional barriers to switching occupations, including credential recognition and language requirements, making them less able to exit gig work when it becomes unprofitable.

Historical Parallels: 2008 and the Taxi Industry

When oil hit $145 per barrel in July 2008 and gas peaked at $4.16 per gallon, the taxi industry provided a preview of today's dynamics. The Taxi, Limousine and Paratransit Group reported that the average U.S. taxi driver spent about $14,000 a year on gas, an increase of over 40% in two years [23]. New York City cabbies, who normally worked 60-70 hours per week and earned $27,000-$33,000 annually, responded by extending shifts from 12 to 14-16 hours per day, with many working seven days a week [23].

The 2008 taxi response reveals a pattern recognizable in 2026: drivers absorb costs by working longer rather than quitting, because their alternatives are limited and their fixed costs (medallion leases in 2008, car payments in 2026) continue regardless. Congress responded with the Gas Price Spike Act of 2008, though the recession that followed lowered prices before most legislative remedies took effect [24].

Today's app-based platforms differ structurally from the taxi industry in ways that cut both directions. On one hand, gig drivers face lower fixed costs — no medallion lease, no dispatch radio fee — making it easier to pause work. On the other hand, they lack the regulated fare increases that taxi commissions could impose, leaving them entirely dependent on platform pricing decisions.

Legislative and Regulatory Responses

Several legislative responses have emerged in 2026. At the federal level, U.S. Senators Mark Kelly and Richard Blumenthal introduced the Gas Prices Relief Act of 2026, which would suspend the federal excise tax of $0.184 per gallon through October 2026 [25]. Congressman Chris Pappas introduced companion legislation in the House [25].

At the state level, Georgia became the first state in 2026 to suspend its gas tax — $0.333 per gallon on regular gas — through House Bill 1199, running through May 18 [26]. Indiana Governor Mike Braun issued an executive order suspending the state's 7% sales tax on gasoline for 30 days [27]. Lawmakers in Pennsylvania, California, South Carolina, Connecticut, Tennessee, Virginia, and Florida have introduced or are considering similar fuel tax relief measures [26].

These gas tax holidays provide modest relief. The federal gas tax suspension would save a driver filling 14 gallons roughly $2.58 per fill-up — perhaps $10-15 per week for a full-time gig driver. Economists have debated whether gas tax suspensions actually reach consumers or are captured by retailers and refiners who maintain higher prices. The evidence from state-level tax holidays in 2022 was mixed [26].

The broader policy question — whether gig workers should be reclassified as employees entitled to expense reimbursement — remains unresolved. California's AB5, passed in 2019, attempted to reclassify gig workers as employees, but Proposition 22 in 2020 carved out app-based drivers, and the California Supreme Court upheld that exemption [28]. AB5-style reclassification would, in theory, require platforms to reimburse drivers for mileage at a rate closer to IRS standards. Opponents argue this would raise consumer prices and reduce the flexibility that attracts many workers to gig platforms in the first place. Independent economists note that reclassification would shift costs — from drivers absorbing fuel expenses to consumers and platforms sharing them — rather than eliminating them [28][15].

The Structural Question

The current fuel price shock exposes a structural feature of the gig economy: costs that were manageable at $2.50 gas become unsustainable at $4.50, but the platform model offloads that variability entirely onto workers classified as independent contractors. Platforms set the price consumers pay and the cut they take; drivers control only which trips to accept and how many hours to work.

When gas was cheap, this arrangement produced workable economics for most drivers. As crude oil has climbed above $100 per barrel on geopolitical tensions — with WTI hitting $114 in April 2026 [2] — the model's vulnerability to fuel shocks has become apparent. Full-time drivers report net hourly earnings in the low double digits or single digits after expenses, while platforms have posted growing revenue and widening take rates [16][17].

Whether this pressure produces lasting change — through legislation, platform policy, driver organizing, or simple attrition — depends in part on how long elevated fuel prices persist. If geopolitical conditions stabilize and crude returns below $70, the pressure valve releases. If prices remain elevated through 2026 and beyond, the gig economy's labor model faces a test that cashback cards and $5 gas bonuses are not designed to withstand.