Uber, Lyft drivers switch to Teslas as high gas prices squeeze profit

Some Uber and Lyft drivers are finding that renting or buying a Tesla, the luxury electric car, is a more profitable option now amid soaring gas prices that have upended the economics of gig work.

Last summer, Heidi Barnes, 34, thought about upgrading her beloved 2009 Toyota Camry, which she nicknamed “The Beast,” for a sleek Tesla Inc. Model 3 sedan. The Lancaster, California-based driver never imagined that the high-end vehicle would become less of a splurge and more like a last resort until the average price for a gallon of gas in the US surpassed US$4 for the first time in March. Almost overnight, a full tank went from costing Barnes roughly US$60 to a day to more than US$100, making it harder to make a decent profit from ferrying passengers around Los Angeles County. “It was a huge push to get in a Tesla sooner rather than later,” Barnes said.

Barnes opted to rent a standard Tesla Model 3 for a month through Hertz, which has a deal with Uber Technologies Inc. offering drivers a weekly rate of US$344 that includes insurance, basic maintenance, and unlimited miles. Even after accounting for the cost to charge the car, Barnes was paying roughly US$450 a week for “the car of her dreams,” less than the nearly US$600 required to fuel her Camry. In her first week, Barnes’ earnings covered the cost of the rental for the month.

Her new ride is also a hit with passengers. “They’re a lot more generous,” Barnes said. “Usually I’m lucky to get US$1 to US$3 tips but it’s now US$10 or US$15, sometimes consecutively.” In total, she netted over US$2,600 during her 25-day rental, more than double the US$800 to US$1,000 she typically made from driving the “Beast,” according to screenshots of earnings she provided to Bloomberg.