California’s Plan to Electrify Uber and Lyft Doesn’t Add Up

By Andrew McCollum On Mar 22, 2022

California regulators, who are still hammering out the details of the Clean Miles Standard, have sensed the tension between drivers and the companies. “Employment status is the elephant in the room,” Shrayas Jatkar, a policy specialist at the state Workforce Development Board, said at a recent meeting hosted by state agencies involved in writing the rule.

Despite this, Uber and Lyft have spent more than $200 million to ensure that drivers in California remain independent contractors, and are ultimately responsible for their own EV transition. In 2020, the firms alongside delivery companies DoorDash and Instacart, spent that much to orchestrate an aggressive ballot measure campaign that ultimately convinced a majority of state voters to cement that employment status. In exchange, drivers receive a minimum wage guarantee while driving to and completing rides (but not while waiting for them) and a health care subsidy for those who drive a high number of hours per week. Drivers are still not eligible for traditional employment benefits like full workers’ compensation and sick pay.

Drivers’ employment status has proven a barrier to electrification, says Sam Appel, the California state manager at BlueGreen Alliance, a coalition of environmental and labor groups. “This business model creates a huge financial and operational impediment to rolling out a technology that needs to be rolled out at scale, with a huge investment behind it,” he says.

That’s too bad, because environmental experts say that electrifying ride-hail vehicles is a great idea—partly because, contrary to the companies’ early marketing, the business is not naturally good for the Earth. Recent research by the Union of Concerned Scientists estimates that ride-hailing trips cause on average 69 percent more pollution than the trips they displace, even the ones taken in private cars. The problem is that Ubers and Lyfts have to travel between fares, usually burning gas along the way. Turn those trips electric, though, and the numbers don’t look so bad. Electric ride-hailing trips, the same analysis found, would cut emissions by half compared to private cars.

Jeremy Michalek, a Carnegie Mellon University professor who studies electrification policy, says that he’s hard pressed to think of a better sector to electrify than ride-hailing. The vehicles cover a lot of miles. Soon, there will be a lot more electric models available in the US, especially compared to other high-pollution vehicles like trucks. “It really makes sense that there’s a focus on that application,” Michalek says.

In addition to their investments, Uber and Lyft say they will need the government’s help to hit their 2030 goals. “Now we’re seeing some of the stick-style policies start to form in California, we hope there will be carrots to follow as well,” says Adam Gromis, who handles Uber’s sustainability policy. The companies would like to see more government subsidies for prospective low-income EV buyers (California already offers some), programs that get chargers into apartment buildings, and a more complete network of public stations.

Gromis cites a new congestion pricing plan in London as a positive step towards electrification. There, the mayor has proposed to expand a program that charges drivers of non-electrics high fees to travel through the heart of the city. A similar scheme is in the works in New York City but is years behind schedule.

If Uber and Lyft don’t meet the target to have all their cars electrified by the end of the decade, they can offset remaining emissions by upping their pooled rides (a service that was discontinued during the pandemic) or reducing the number of miles each driver travels between trips, or even investing in bike or walking infrastructure. The rule will slowly begin to ratchet up the companies’ emissions targets beginning next year. But California drivers say that without renewed trust and transparency, they’re not sure the companies’ electric dreams will make it off the ground.