Mar 22, 2022 8:00 AM

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

A 2030 target for electric vehicles to dominate ride-hailing is a lofty goal. But it’s the drivers, not the companies, who may have to foot the bill.

UberLyft driver photographed through car windshield with Uber Lyft stickers as well as California license plate in window

Gabe Ets-Hokin has been picking up Bay Area Uber and Lyft passengers in electric vehicles since 2018, and he says he is never going back to petrol. “The day-to-day reality of driving an electric vehicle is like a gasoline car, except it’s quieter, more fun to drive, more comfortable, and passengers love it,” he says.

EVs, he explains, are an especially good fit for the stop-and-start of driving in dense cities because they use regenerative braking, which captures the energy used to slow to a stop and “reinvests” it in charging the battery. Instead of tracking down public chargers, he hooks his car up to the charger he’s installed at his house.

Every night, “it’s like magic gas fairies fill your car with $1.16 gas,” he says. “Who wouldn’t want that?” It’s an especially nice perk now, with global gas prices so high that drivers say it's cutting into their profits.

Now ride-hailing companies are relying on the majority of California’s roughly 300,000 drivers to follow Ets-Hokin’s lead, replacing their gas cars with electric equivalents. Lyft and Uber are following up on pledges they both made in 2020: to electrify all their US rides by the end of the decade. And California is holding them to it with a new rule, called the Clean Miles Standard. By 2030, the companies must make sure at least 90 percent of all the miles driven in the state are in electric vehicles, five years before the state hopes to nix sales of gas-powered vehicles.

But it’s not the companies who will have to pay for this change. The burden would likely fall on an already encumbered group of independent workers. According to a 2020 study of ride-hail drivers in Seattle, drivers make an average $9.73 an hour, after accounting for expenses like a vehicle, fuel, insurance, and vehicle cleaning. Another 2020 survey, this one of San Francisco drivers, found that more than a third would have to borrow money to pay off a $400 emergency expense.

“If you’re not making a lot of money, you’re not going to be able to buy a Tesla to drive for Uber,” says Alvaro Bolainez, an Uber and Lyft driver and the vice president of Rideshare Drivers United, a California-based advocacy group.

In the US, drivers are independent contractors, responsible for financing and maintaining their own vehicles. And right now, electric vehicles are expensive, with a global semiconductor shortage curtailing production and driving up prices even more. Plus, for drivers who rent their homes, live in apartment buildings, or rely on off-street parking, installing charging stations so they can charge overnight is costly, complicated, and in some cases simply impossible. These drivers must depend on sometimes patchy, sometimes expensive networks of public charging stations, where it can take anywhere from 15 to 45 minutes to recharge. And if they damage their cars, they have to rely on a still underdeveloped repair and parts industry for EVs.

The price of EVs is so high that paying back the cost of renting one might “force me to work for this company for countless hours,” says Bolainez. After eight years of driving, and what he describes as repeated cuts in how much of a fare goes to drivers, he says he doesn’t trust the companies to do the right thing, even when it comes to emissions.

Ets-Hokin, the EV evangelist, who also writes about ride-hailing for the driver-focused blog The RideShare Guy, doesn’t either. “It’s just a constant parade of lies from these guys,” he says of the companies. Two years on, he says, he hasn’t seen either do enough in the way of promoting electric vehicles.

Elizabeth Irvin, a transportation policy expert with the research and advocacy organization the Union of Concerned Scientists, estimates that to hit California’s 2030 goal, more than half of the state’s 300,000-plus rideshare drivers will have to get into electric cars—especially the small share of drivers who complete the majority of the trips on the platforms.

Uber says it will spend $800 million by 2025 to help drivers transition to EVs. One program pays drivers an extra $1 per fare they pick up in a plug-in or battery-electric vehicle. (After a Bloomberg report last year that drivers weren’t receiving their EV bonus, Uber attributed the error to a glitch and said it paid those drivers back.) In some cities it offers another program, called Green, that allows riders to pay extra to take an electrified ride. Uber says it currently has almost 15,000 drivers in zero-emission vehicles on its app worldwide, though the majority of those are in Europe.

Last fall, Uber announced a buzzy partnership with Hertz that would allow up to 50,000 drivers to rent Teslas. But some drivers told WIRED that the program, which can cost more than $1,600 a month, is too expensive for a gig worker. Abdul Farah sometimes drives for Uber in Minnesota’s Twin Cities to make extra money, and he rented a Tesla through the Hertz program last December, during the busy New Year holiday. Because he lives in an apartment, without easy access to a charger, he says he spent too much time looking for charging and then waiting for his car to “fill up” with electricity. “As an Uber driver, your time is money,” he says. People tend to get distracted by cool new things, he says. “I’m here to tell you not to do it.”

Neither Uber nor Hertz responded to questions about their rental program.

Paul Augustine, Lyft’s head of sustainability, says the company will eventually offer electric vehicles nationwide on Express Drive, the program it uses to connect a small share of its drivers to rentals, though it doesn’t have them now. A trial with the state of Colorado already allowed Lyft to put 200 Express Drive renters in EVs in 2019. He expects the price of electric vehicles and their components to fall in the coming years. “We need to make sure we’re not disengaging low- and moderate-income drivers,” he says.

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.

Updated 3/23/2022 12:00 PM ET: This piece has been updated after Uber clarified that it has 15,000 EV drivers on its app worldwide.