American car owners
and commuters are feeling the burn this summer. If your daily drive to work is more expensive than ever, you’re not alone. Jerry
, the car ownership super app
, investigates how inflation is affecting our commute for the worse, and what can be done about it. Inflation: Bearing the high price of gas
The national average for gasoline hit $5 in June 2022, and it doesn’t look like American drivers will feel relief anytime soon. In fact, consumers are now paying about $2,914 a year to commute, versus $757 last year, according to Overheard on Conference Calls
. In big cities like New York, it costs as much as $4,040 to commute to work, a 47% increase from the year before due to inflation. With increasing gas prices, some drivers have become more conscious consumers. However, there’s less wiggle room for farmers, tradespeople, health care workers, rideshare drivers, and others who are required to drive for work.
Lower-income citizens or those who live paycheck to paycheck are especially feeling the effect on their wallet. This means more difficult choices when prioritizing housing, food, and debt.
Since May 2019, the average transaction price at gas stations has increased by 34%. And because the high gas prices are due to global events outside the government’s control, there’s not much the government can do to help.
In 2020 when the world closed down due to COVID-19, the demand for gas plummeted—as all forms of travel came to a halt. As a result, oil companies shut down refineries, which has proved difficult to reverse
in a rapid manner now that demand for gas is back up. “The good news is that the current situation is quite a bit different from the gas crisis of the 1970s, which was marked by gas-guzzling cars and much higher foreign oil reliance,” VOX
tells us. Some believe that gas price inflation will develop existing trends exponentially. It may cause consumers to seek out remote work, move closer to work or buy an electric vehicle (if they can afford it).
Inflation: When commuting is part of your job
Employees who drive for a living, such as truck drivers, typically work for project managers or large outfits. Most of the time, these drivers are reimbursed for gasoline, or given gas cards to use at the pump.
But if you work for companies like Lyft or Uber, you’re pretty much on your own. When gas was about $4 back in March 2022, Lyft and Uber added small surcharges to trips (about 50 cents or so) to help drivers out. Unfortunately, the rate hasn’t risen since then.
And if you live in a location like the Bay Area where gasoline averages $7 a gallon for your daily commute, the cost can really dip into your hourly or daily rates. Imagine working a 12-hour day for $300, only to make $180 after spending $120/day on gasoline. And that doesn’t account for insurance, cell phone bills, and maintenance.
If you’re a $20/hr freelancer without anyone mitigating your fuel costs, it’s hard to save during this time of inflation or work on paying off your debt. And low-wage workers making the U.S. average minimum wage of $7.25/hr might as well stay home, as the price of their commute allows them to break even.
What we can do despite inflation
Unfortunately, the U.S. government doesn’t have much leverage to lean on in this age of inflation. According to VOX, “The Federal Reserve has already raised interest rates, a painful process that tries to slow down spending by making borrowing more expensive, which is supposed to make costs go down.”
President Biden has released fuel from America’s emergency stores, though it hasn’t made much of a dent in the price of gas. Biden has also asked Congress to suspend federal gas taxes for three months—some states have already put their gas tax on pause.
Since these taxes typically pay for highway and road improvements, they’ll still need to be paid for through other types of taxes. Philadelphia has proposed a new law that requires firms with 50 or more employees to offer benefits for those who commute.
While it’s hard to make significant changes in the short term—we have the job we have and we have the car we have—American workers can work toward more cost-effective solutions for the future.
For example, workers can look into the possibility of switching jobs or industries. We may see Americans move closer to their offices, or demand the option of remote work. Even though only 20% of job postings on Linkedin were remote in April, they received over half of all applications.
Since many workers have already experienced what it’s like to do their job from home, they see little point in being in the office every day. It couldn’t hurt to ask your boss if they’d be willing to incorporate a hybrid work system. Some companies are offering gift cards, fuel stipends, and other benefits to retain employees.
New York City’s MTA is cutting fair hikes to encourage riders, and cities in Silicon Valley are investing in electric trains and other public transportation
Lastly, with the cost of gas at an all-time high, many people are avoiding driving altogether. Workers who don’t have to drive to work order food and supplies online, do virtual happy hours, and walk to places more than ever before.
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