The energy crisis is hitting the ride-hailing model hard. Faced with soaring fuel prices since the start of the conflicts in the Middle East, Uber is rolling out an emergency plan in France: lower fares, reduced commission rates and new incentives to speed up the switch to electric vehicles. Behind these announcements, the American firm’s aim is to keep drivers in business at a time when their costs are skyrocketing.
A fuel crisis that is undermining the entire sector
The job of a private hire driver is often seen as precarious, but this is now more true than ever. Indeed, for several weeks now, there has been a sharp rise in petrol prices. As everyone knows, this increase is linked to geopolitical tensions in the Middle East; the price per litre has now risen above €2, which is having a direct impact on drivers’ incomes.
For the approximately 30,000 private hire drivers active on ride-hailing platforms in France (Uber, Heetch, Bolt), the impact is immediate. Drivers using petrol-powered vehicles are seeing their running costs rise sharply, whilst their working conditions are also deteriorating: longer waiting times at petrol stations mean fewer journeys are completed, leading to a drop in profitability.
Uber is banking on a 30% reduction in fares to boost demand
Very recently, the US ride-hailing giant announced several measures to address these issues. The first is to adjust prices to boost business. Uber has announced a 30% reduction in fares for its Uber X Share carpool service. This measure is described as temporary.
The idea is simple: to attract more customers to offset the decline in drivers’ earnings. And the solution is already in place. Since early March, these shared rides have surged by 54%, demonstrating strong demand for cheaper journeys in an inflationary climate. In other words, Uber is seeking to offset squeezed margins by increasing volume.
Lower commission rates for the most active drivers
At the same time, the platform is also adjusting its own model. Around 1,000 of its most active drivers will benefit from a “significant reduction” in service fees through the Uber Pro programme.
The aim is clear: to directly offset the rise in fuel costs for those who drive the most. This is a targeted measure that prioritises those who are most dependent on their private hire work.
Electric vehicles are becoming an economical solution, not just an environmentally friendly one
But beyond these emergency measures, Uber is above all accelerating its fundamental transformation: moving away from combustion engines. It is important to note that, since 2022, it has no longer been possible for new drivers to register with a diesel-powered vehicle. The platform has announced: “a one-off subsidy of €1,500 towards the hire of new or used electric vehicles, with unlimited mileage via Flexifleet”.
This initiative already appears to be having an impact. Between February and April, enquiries about switching to electric vehicles rose by 60%, whilst the uptake of electric vehicles increased by five percentage points.
This strategy is backed by a €75 million fund, launched in 2020 and partly financed by customers, to support drivers’ transition.
A fleet that is already largely electrified
The results are clear. In just a few years, Uber’s fleet in France has changed dramatically:
- diesel, which accounted for over 85% of vehicles in 2020, now accounts for less than 5%;
- 93% of vehicles are now hybrid or electric;
- and around 25% are fully electric.
In the same vein, the company recently announced the acquisition of HysetCo’s fleet of hydrogen-powered taxis in Paris, adding a further 800 vehicles to its ecosystem.
These measures appear to be an immediate response to the fuel crisis. But they also reflect a more fundamental shift in the Uber model. The sharp rise in oil prices is acting as a catalyst: it is undermining the viability of petrol and diesel vehicles and making electric vehicles a more economically attractive option for drivers. One key question remains: will these adjustments be enough if the energy crisis becomes a long-term issue?
