Demand for chauffeured cars is back to 2019 levels,
according to the National Limousine
Association, but travel managers whose programs depends on such suppliers or
ride-hailing providers should prepare for some sticker shock.
The average cost of rides across the industry is higher than
it was pre-pandemic, according to the NLA, with rates up due to the increased
cost of labor, lack of inventory and rising fuel prices.
Many suppliers have added fuel surcharges. Corporate ground
transportation technology supplier HQ reported that four times more black-car
rides in March had a fuel charge than in February, and prices with some
fluctuation have remained high since.
Travel buyers can attempt to negotiate these surcharges in
their contracts. HQ said some companies have added either a flat-rate per-ride
surcharge that has averaged from $2 to $6, or a percentage agreement, averaging
between 4 percent and 6 percent of a ride’s base cost.
Also in March, ride-hail providers Uber and Lyft announced
fuel surcharges of up to 55 cents per ride. The surcharges are supposed to be
temporary, according to the companies.
Further, suppliers have increased pay and added other
incentives to lure new and returning drivers back to work. Those costs
generally have been passed onto riders. Still, 86 percent of NLA member
respondents to a February survey said that they continued to experience
challenges hiring new employees. Lyft CEO Logan Green, however, during a May
earnings call, noted that total active drivers were up by more than 40 percent
year over year, and new driver activations were up 70 percent for the same
period.
Even with drivers returning, it might be more
difficult to snag a ride—and they could cost more—at least for Uber, if
travelers are heading to destinations outside of airports or city centers. The
company plans to implement its “upfront fare,” which will allow drivers to see
a customer’s destination in advance of accepting a trip. Rides to “outskirts of
a neighborhood” will be “priced up” so drivers know “exactly what they are
accepting or not accepting,” Uber CEO Dara Khosrowshahi said during a May earnings
call.