In his State of the City address on January 26, New York City mayor Eric Adams announced that Uber and Lyft will be required to operate zero emissions electric vehicles only by 2030. New York City is one of the world’s largest markets for app-based ride-hailing markets. The new policy initiative by the mayor has the potential to affect an estimated 100,000 for-hire vehicles.
Adams said the move will build on efforts his administration has made to electrify the city’s fleet of vehicles while installing charging infrastructure to power them in all five of the city’s boroughs. The mayor will likely implement his plan through the city’s Taxi and Limousine Commission, which regulates the for-hire vehicle industry, including Uber and Lyft, according to The Verge.
Typically, Uber and Lyft put up stiff resistance to any new regulations that will affect their business model, but in this case both are supportive of the city’s EV initiative. “We are excited to partner with New York City on our journey,” Paul Augustine, Lyft’s director of sustainability, said in a statement. “New York’s commitment will accelerate an equitable city-wide transition to electric, and we’re eager to collaborate with the TLC on an ambitious plan for a rides hare clean mile standard.”
“We applaud the Mayor’s ambition for reducing emissions, an important goal we share,” Josh Gold, senior director of policy at Uber, said in a statement. “Uber has been making real progress to become the first zero-emissions mobility platform in North America, and there’s much more to do.”
Uber & Lyft To Go Electric
Both companies are already in the process of taking steps to incentivize their drivers to switch to electric vehicles, either through partnerships with rental car companies like Hertz or by authorizing higher fares for drivers who use EVs. Uber and Lyft have both said they aim for their fleet to be “100 percent electric” by 2030, so the new policy from the city doesn’t really have too much of an impact on them — unless they fail to reach their goals on their own. The city mandate will be the spur that keeps them working toward using only electric cars by the end of this decade.
Of course, getting the millions of people who drive for Uber and Lyft to switch to electric vehicles will be no easy task, The Verge points out. Ride-hailing drivers are classified as independent contractors and many use their personal cars to drive for not just one but several gig economy companies. Also, EVs tend to be more expensive than gas vehicles, despite costing less to fuel and maintain. That steep upfront cost may make it a challenge for many drivers, who typically operate with incredibly tight margins, to make the switch.
New York isn’t the first government to require an all-electric ride-hailing fleet. California adopted new rules in 2021 requiring ride-sharing companies to electrify their fleets by 2030 — a few years before the state expects to completely prohibit the sale of new gas cars.
Uber Is Designing Its Own Vehicles
In January, Uber CEO Dara Khosrowshahi told a conference hosted by the Wall Street Journal that his company is working with several automakers to develop EVs that are purpose built for ride sharing and delivery. It’s part of Uber’s larger goal of electrifying its entire fleet by 2040.
What would these purpose-built cars be like? Acceleration and top speed are not prime considerations for a ride hailing or delivery vehicle. Nor are nimble handling and off-road capability. For ride-hailing, the priorities are ease of access and comfortable seating. Seats that face each other so passengers can communicate easily are preferred by customers as well. The hope is that cars with lower top speeds will cost less to manufacture while being more efficient at carrying multiple passengers.
For delivery vehicles, cargo capacity in a package capable of negotiating urban congestion is high on the wish list. Uber imagines using two- or three-wheeled vehicles that are more mobile but still have room for storing packages, groceries, and more. The company previously announced a partnership with Arrival, an EV startup based in the UK, to create custom ride-hailing cars. Arrival teased a design that could be a good example of what the company is looking for.
Arrival planned to partner with Uber in the UK to develop and manufacture a low cost electric vehicle designed specifically for ride-hailing duty, according to Reuters. Presumably, that meant big doors, plenty of headroom and cargo space, a range of around 250 miles, and few frills. Arrival and Uber said in a joint statement the Arrival Car would be an “affordable, purpose-built electric vehicle for ride hailing,” and would go into production in the fourth quarter of 2023. That is unlikely to happen. Arrival announced this week it is cutting its workforce in half as it struggles to stay afloat financially, according to TechCrunch, so it doesn’t appear the Uber/Arrival partnership will bear fruit any time soon.
Uber has said it plans to be a fully electric mobility platform in London by 2025 and has raised more than $188 million to help its drivers in that city to upgrade their current ride to an electric vehicle. “Our focus is now on encouraging drivers to use this money to help them upgrade to an electric vehicle, and our partnership with Arrival will help us achieve this goal,” said Jamie Heywood, Uber regional manager for northern and eastern Europe. Uber planned to sign up 20,000 more drivers in the UK after Covid restrictions were lifted.
Recently, Uber expanded the ability of its customers to specify they wanted to ride in an electric car in two dozen US cities. The company has also made it possible for its drivers to rent a Tesla or Polestar through a deal with Hertz. It has created an “EV Hub” in the Uber Driver app — a one-stop location where drivers can get information about EVs, and the financial incentives available. It also helps them compare the cost of ownership of an EV to that of a conventional car.
The New York City policy could see up to 100,000 electric cars added to the city’s streets, replacing conventional cars with internal combustion engines. It’s encouraging that Uber and Lyft are both fully on board with the new policy. It’s another example of the EV revolution moving inexorably forward. It’s nice when governments and corporations can work together for the common good.
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