The EVolution #14: Clean air & rideshare

The pros, cons, and limitations of Uber and Lyft embracing electric vehicles

One evening earlier this week, I pulled over on a neighborhood street while my friend went to pick up our takeout order. Moments later, I was startled when my rear car door opened. A woman climbed in and began tapping away on her phone. I turned to her quizzically, but when she finally looked up, she just said, “Yeah, Uber? For (Helen)?”

When she finally realized I wasn’t her driver, she got out without a word. Truthfully, part of my surprise was because I drive a red Tesla sedan—not a common Uber vehicle, and one where the unique door handles are hard to miss. On the other hand, if any place epitomizes Tesla ubiquity, it’s San Francisco. If nothing else, at least, the incident prompted my musing on the intersection of ridesharing and electric vehicles!

Better for drivers, better for the environment, and far behind China

First, some good news. Rideshare drivers in cities should be particularly keen on electric vehicles, which, unlike traditional gas cars, are more efficient in stop-and-go driving. This is because their use of “regenerative” braking partially recharges the battery.

I’ve poked around Uber and Lyft drivers’ forums on Reddit and Quora to estimate a majority log 50-150 miles daily, well within the range of virtually any current EV model. Drivers with a home charger or suitable wall outlet can easily refuel when off-shift, but even using public chargers should typically be cheaper than filling up a gas tank. Over time, cost savings on fuel (and maintenance — no oil changes, spark plugs, etc.) are significant.

Here’s Bloomberg on one prolific electric rideshare driver:

Kinder kept a meticulous spreadsheet of income and expenses for all of his 6,000-plus ride-hailing trips. He quickly realized an important truth: It's more profitable to operate an EV than a gas-powered car. Kinder spends about $5 per day on electricity to charge his car. Paying for enough gasoline to cover hundreds of miles each day would cost about $18. That $13 difference amounts to over $3,000 per year that goes right into his pocket.

An additional benefit of a shift to electric ridesharing is that the communities in which these vehicles are driving through experience a reduction in street noise and tailpipe emissions. And given the thin profit margins that many rideshare drivers face—moreover, in an industry that “emits more heat-trapping gases than entire countries such as Switzerland or Sweden”—the likes of Uber and Lyft have compelling reasons to encourage this shift.

A sobering stat: in China, where Didi Chuxing is the dominant player, 21% of ridesharing vehicles are already electric. In the U.S., where that share is only 0.5% and new EVs still have a higher average upfront cost than gas cars, both government and industry need to actively facilitate this transition.

What will Uber and Lyft do?

Mobility startup Revel has launched a small, Tesla-only ridesharing fleet in NYC

On a recent work trip to New York, I saw in action a bright blue Tesla which Revel has launched there. Seemingly addressing the twin thorny issues of gig worker treatment and CO2 emissions, all of Revel’s drivers are salaried employees and their entire fleet (a few dozen vehicles) consists of Teslas.

Very cool, if they can make it work—but let’s be real. Niche plays aside, rideshare electrification in the U.S. will come down to what Uber and Lyft choose to do. Last year, both companies announced that their entire fleets would be 100% electric by 2030—a policy that could be hugely impactful… but is also difficult to pull off given it is individual drivers who need to purchase new vehicles. (That’s why California is flexing some regulatory muscle toward this purpose.)

Will Uber and Lyft really push to make this happen? Their commitments thus far have mainly been some limited discounts on EV purchases and rentals. In 2021 Uber rolled out an “Uber Green” option in some markets, where passengers can pay a $1 surcharge to ride in a hybrid or electric vehicle. The fee is split between the driver and a company fund to promote electrification.

Lyft, meanwhile, seems to be banking on EV sticker prices to soon be lower than comparable gas models. I agree with this prediction: “We expect that by mid-decade, EVs will be more economical for rideshare drivers than gasoline cars”.

Not a climate change panacea

Even having vast Uber and Lyft fleets of affordable Chevy Bolts isn’t a cure-all. When ridesharing—whether in tradition or electric vehicles—displaces lower-emissions forms of transportation, it is not environmentally beneficial.

For years I’ve relied significantly on my bike and on buses to get around the urban areas in which I’ve lived. I believe most American cities need to evolve to become far less dependent on individual car ownership. Public transportation and carpooling are better options environmentally and economically, while walking and cycling are better options for personal health. Communities featuring more green space, and which can be navigated easily on foot or on two wheels, are more attractive places to live and work.

Chart by Bloomberg based on UCS report; UCS also found that electric buses have less half the emissions of traditional diesel or gas buses

Even so, for the foreseeable future, there will be a lot of cars on the road, including many ridesharing vehicles. As many of those as possible should go from being gas-powered to battery powered!