An Uber driver in downtown Toronto on Wednesday. Gas prices have surged by about 30 cents a litre on average in Canada in the past month.Laura Proctor/The Globe and Mail
Over the last two weeks, Abdul Hanfi, a rideshare driver in Toronto, has spent approximately $300 on gas for his Toyota Corolla, almost 40 per cent more than what he used to pay before the U.S.-Israeli war on Iran began.
In Mr. Hanfi’s job, gas prices are crucial in determining his final take-home pay. After accounting for vehicle costs and car insurance, he said he made slightly less than $1,400 working 14 consecutive days, averaging eight hours of driving a day. As a self-employed gig worker, he will still have to pay income taxes on those earnings.
“It’s become too little. I’m asking myself – why am I still driving? Maybe I gotta log out of these apps and get my old construction job back,” Mr. Hanfi said in a recent interview
He’s not the only driver grappling with the idea of leaving the industry altogether. Drivers and labour advocates have said that since rideshare giants such as Uber and Lyft introduced algorithmic pricing in 2024, their wages have declined.
Now they’ve been further squeezed by gas prices, which have surged by about 30 cents a litre on average in Canada in the past month. And while Tuesday’s ceasefire agreement between the United States and Iran have sent crude prices tumbling, the episode has left a lasting impression on rideshare drivers, prompting some to start looking for work elsewhere.
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Kareem Goawala, an international student at Centennial College in Scarborough, is a driver for four rideshare apps in Toronto: Uber, Lyft, Hovr and Hopp. Since gas prices started climbing, he has reduced the number of days he logs on to those apps to two from six.
“I only drive downtown on weekend nights because that’s where I can make the most. Gas is too expensive to do six days.” he said.
At the beginning of this week, Mr. Goawala got in touch with an old contact who runs a grocery warehouse in the east end of Toronto and had been trying to hire Mr. Goawala for months. He decided to take his contact up on his job offer, even though he prefers the flexibility of being a rideshare driver.
For years, rideshare drivers in Canada (of which the majority use Uber) used to get compensated in a fairly predictable manner: based on the time and distance of each ride, along with higher rates from surge pricing that was driven by demand at a particular time.
Then in October, 2024, Uber introduced “upfront pricing,” a system that relies on a complex algorithm to determine fares for a consumer and wages for a driver. Uber says upfront fares offer drivers a new level of transparency that they previously did not have, because they will be able to know their take-home rate for a ride and the drop-off location before they decide whether to accept it. But drivers are no longer able to estimate their daily earnings based simply on time and distance, creating a new level of opaqueness to gig-worker compensation.
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This uncertainty, coupled with the current unpredictability of gas prices that have soared because of geopolitical events, has made it hard to justify continuing to work as a rideshare driver, according to both Mr. Goawala and Mr. Hanfi.
“Because these are black box algorithms, there is no oversight on them and we have no idea what inputs these companies are using to set wages,” said Laura Padin, senior director at the National Employment Law Projects, a non-profit labour advocacy group based out of Washington. (Rideshare companies are using these algorithms to set prices in their U.S. markets as well.) Ms. Padin’s research suggests that algorithms can reduce an individual worker’s earnings because companies can tailor pay rates to personal performance based on the data they have.
On March 30, in light of spiking gas prices, Uber began offering an additional 5 per cent cash back on gas for drivers who use its new Uber Pro card, a free credit card that Uber drivers can sign up for online. Critically, however, the cashback rates are unequal: they increase based on the driver’s rating on the app. For example, a driver rated Diamond (the highest rating) would get 11 per cent cash back on gas from March 30 to May 26, whereas a driver rated Blue (lowest rating) would get 6 per cent cash back.
Mr. Goawala and Mr. Hanfi have Uber Pro cards, but they say the cashback amounts are essentially negligible in the face of high gas prices and the overall high cost of living in Toronto.
In a statement, Uber spokesperson Keerthana Rang said that the company had not implemented any fuel surcharge for riders, and that consumer prices remained stable.
Lyft did not respond to a request as to whether they are subsidizing gas prices for drivers. Hopp, the Estonian rideshare company that began operating in Toronto last February, said in an e-mailed statement that it was preparing to introduce “targeted measures” to help drivers manage short-term cost pressures, but did not elaborate on when those measures would be introduced.