Some Uber and Lyft drivers are finding that renting or buying a Tesla, the luxury electric car, is a more profitable option now that soaring gas prices have upended the economics of gig work.
Last summer, 34-year-old Heidi Barnes thought about upgrading her beloved 2009 Toyota Camry, which she nicknamed “The Beast,” for a sleek Tesla 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 petrol in the US surpassed $4 for the first time in March.
Almost overnight, a full tank went from costing Ms Barnes roughly $60 a day to more than $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,” Ms Barnes said.
Ms Barnes opted to rent a standard Tesla Model 3 for a month through Hertz, which has a deal with Uber offering drivers a weekly rate of $344 that includes insurance, basic maintenance and unlimited miles.
Even after accounting for the cost to charge the car, Ms Barnes was paying roughly $450 a week for “the car of her dreams”, less than almost $600 required to fuel her Camry. In her first week, Ms 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,” Ms Barnes said. “Usually I’m lucky to get $1 to $3 tips but it’s now $10 or $15, sometimes consecutively.”
In total, she netted more than $2,600 during her 25-day rental, more than double the $800 to $1,000 she typically made from driving the “Beast,” according to screenshots of earnings she provided to Bloomberg.
This month, the national average price for a gallon of petrol topped $5, an all-time high since the American Automobile Association began collecting pricing data in 2000. As prices continue to climb, the difference between petrol-powered cars and electric ones is only becoming more stark.
For drivers who have seen their take-home pay whittled down, the switch isn’t just skimming a few dollars from expenses, it’s a lucrative earnings opportunity.
The number of ride-share and delivery drivers who opted to hop behind the wheel of a Tesla jumped 186 per cent in May compared with last June, according to Gridwise, an app that helps gig workers manage their trips.
The Tesla trend also comes at a time when Uber and Lyft are on the hook to show progress towards achieving their goal of switching entirely to EVs in Europe and North America by 2030.
Uber offers an additional $1 per ride to drivers who switch to an EV — which can earn them up to $4,000 a year under the company’s Green Future programme. Last month, the San Francisco-based company revamped its driver app with an “EV hub” that features a charging map and made rides in EVs a premium option for passengers.
Lyft, meanwhile, offers no financial incentives for drivers to switch to EVs.
Since launching its partnership with Hertz in November, Uber has seen more than 15,000 drivers rent a Tesla. “Participation has been really compelling,” said Adam Gromis, Uber’s public policy manager for sustainability.
“Drivers are smart and they know how to maximise their take-home pay.”
Uber has about 1 million Uber drivers in the US, according to The Rideshare Guy, a website dedicated to the ride-share industry.
At Lyft, growth of EVs on the platform is at record levels, a spokesman said, and there has been a 27 per cent increase in EV use since the first quarter. While Teslas are the dominant EV used by Lyft drivers, the company is also seeing significant growth from other manufacturers, particularly Kia, Mr Gromis said.
But reaching those EV goals in the US in less than a decade won’t be easy. In 2021, fewer than 1 per cent of ride-hailing vehicles in the country were electric, according to clean-energy research firm BloombergNEF. Uber is doing better in Europe, where government incentives also help spur the switch to EVs.
One big reason behind the reticence is that the cost of a battery-powered car is still too high relative to a driver’s wages. On average, an electric car now costs $61,000.
Another hurdle is the availability of charging stations. Ms Barnes mostly drives in Los Angeles, where Tesla superchargers are plentiful but often crowded. Without a wait, the process takes about 45 minutes, but when every dock is taken, it can become a much longer ordeal, Ms Barnes said.
“In this job, every minute you’re not on the road picking up a passenger is money you’re leaving on the table.”
Renting is a low-risk option for Uber and Lyft drivers like Ms Barnes who can’t afford to purchase one outright, especially after Tesla raised prices by as much as $6,000 per car.
But for other drivers like Luis Martinez, 34, taking out a hefty loan is a risk worth taking instead of waiting for petrol prices to come down.
Like Ms Barnes, Mr Martinez first started looking to replace his 2012 Toyota Camry Hybrid with an electric car at the beginning of March when petrol prices spiked. He had his eyes set on a new Hyundai Ioniq 5, which, listed at about $47,000, was in his price range. But at dealerships the car was going for as much as $62,000, well above the Manufacturer’s Suggested Retail Price, and the resale market was even worse, Mr Martinez said.
That’s when he settled on the Tesla Model 3 Long Range. “I was throwing $800 at gas every month and I realised instead I could put that money towards a car I could actually own,” he said.
With a $58,000 price tag, Mr Martinez took out a loan. In one week, his $900 car payment is covered and he pockets about $1,000 more in take-home pay.
Persistently high petrol prices and resurgent demand for ride-hailing have created the ideal conditions for a Tesla — a car considered affordable for only well-off buyers — to be within reach for Uber and Lyft drivers. But the maths only makes sense if demand for rides remains elevated.
In May, average transactions per customer at both Uber and Lyft increased 15 per cent compared with last year, according to Bloomberg Second Measure, and the summer travel season typically benefits ride-hailing.
Still, Mr Martinez, who drives in Ventura, California, is acutely aware of the trade-off. “I’ve never taken a loan for that much before and it’s very scary. I’m more stressed because I know I have to drive a minimum to cover the car and doubt creeps in,” he said.
Still, when he pulled the trigger on buying his Tesla, petrol had just crossed $5. Today, it’s north of $6.30, according to AAA. “There’s a lot of anxiety but, for me, the maths makes sense,” Mr Martinez said.
Test series fixtures
(All matches start at 2pm UAE)
1st Test Lord's, London from Thursday to Monday
2nd Test Nottingham from July 14-18
3rd Test The Oval, London from July 27-31
4th Test Manchester from August 4-8
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
Read more about the coronavirus
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
NBA Finals so far
(Toronto lead 3-1 in best-of-seven series_
Game 1 Raptors 118 Warriors 109
Game 2 Raptors 104 Warriors 109
Game 3 Warriors 109 Raptors 123
Game 4 Warriors 92 Raptors 105
SANCTIONED
- Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
- Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB.
- Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.
- Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
- Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
if you go
The flights
Emirates fly direct from Dubai to Houston, Texas, where United have direct flights to Managua. Alternatively, from October, Iberia will offer connections from Madrid, which can be reached by both Etihad from Abu Dhabi and Emirates from Dubai.
The trip
Geodyssey’s (Geodyssey.co.uk) 15-night Nicaragua Odyssey visits the colonial cities of Leon and Granada, lively country villages, the lake island of Ometepe and a stunning array of landscapes, with wildlife, history, creative crafts and more. From Dh18,500 per person, based on two sharing, including transfers and tours but excluding international flights. For more information, visit visitnicaragua.us.
What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
UAE central contracts
Full time contracts
Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid
Part time contracts
Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma
COMPANY%20PROFILE
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Schedule for Asia Cup
Sept 15: Bangladesh v Sri Lanka (Dubai)
Sept 16: Pakistan v Qualifier (Dubai)
Sept 17: Sri Lanka v Afghanistan (Abu Dhabi)
Sept 18: India v Qualifier (Dubai)
Sept 19: India v Pakistan (Dubai)
Sept 20: Bangladesh v Afghanistan (Abu Dhabi) Super Four
Sept 21: Group A Winner v Group B Runner-up (Dubai)
Sept 21: Group B Winner v Group A Runner-up (Abu Dhabi)
Sept 23: Group A Winner v Group A Runner-up (Dubai)
Sept 23: Group B Winner v Group B Runner-up (Abu Dhabi)
Sept 25: Group A Winner v Group B Winner (Dubai)
Sept 26: Group A Runner-up v Group B Runner-up (Abu Dhabi)
Sept 28: Final (Dubai)
MATCH INFO
Everton v Tottenham, Sunday, 8.30pm (UAE)
Match is live on BeIN Sports
Mohammed bin Zayed Majlis
SUNDAY'S ABU DHABI T10 MATCHES
Northern Warriors v Team Abu Dhabi, 3.30pm
Bangla Tigers v Karnataka Tuskers, 5.45pm
Qalandars v Maratha Arabians, 8pm
Punchy appearance
Roars of support buoyed Mr Johnson in an extremely confident and combative appearance
Zayed Sustainability Prize
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
MATCH INFO
What: India v Afghanistan, first Test
When: Starts Thursday
Where: M Chinnaswamy Stadium, Bengalaru
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Walls
Louis Tomlinson
3 out of 5 stars
(Syco Music/Arista Records)
WRESTLING HIGHLIGHTS
What to watch out for:
Algae, waste coffee grounds and orange peels will be used in the pavilion's walls and gangways
The hulls of three ships will be used for the roof
The hulls will painted to make the largest Italian tricolour in the country’s history
Several pillars more than 20 metres high will support the structure
Roughly 15 tonnes of steel will be used
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
SPECS
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Fight card
1. Featherweight 66kg: Ben Lucas (AUS) v Ibrahim Kendil (EGY)
2. Lightweight 70kg: Mohammed Kareem Aljnan (SYR) v Alphonse Besala (CMR)
3. Welterweight 77kg:Marcos Costa (BRA) v Abdelhakim Wahid (MAR)
4. Lightweight 70kg: Omar Ramadan (EGY) v Abdimitalipov Atabek (KGZ)
5. Featherweight 66kg: Ahmed Al Darmaki (UAE) v Kagimu Kigga (UGA)
6. Catchweight 85kg: Ibrahim El Sawi (EGY) v Iuri Fraga (BRA)
7. Featherweight 66kg: Yousef Al Husani (UAE) v Mohamed Allam (EGY)
8. Catchweight 73kg: Mostafa Radi (PAL) v Ahmed Abdelraouf of Egypt (EGY)
9. Featherweight 66kg: Jaures Dea (CMR) v Andre Pinheiro (BRA)
10. Catchweight 90kg: Tarek Suleiman (SYR) v Juscelino Ferreira (BRA)
