As more and more consumers opt to go electric when purchasing a new vehicle, users of ridesharing apps like Uber and Lyft may wonder when they will notice an uptick in the number of electric vehicles coming to their door. According to a report from Juniper Research, the global market for ridesharing services will be close to $1 trillion by 2028 – nearly 50 times the annual revenue of public transit authorities in London, Beijing, and New York City, combined. The impact of vehicle emissions from all of these trips could be significant when it comes to our climate crisis, but the growth trajectory also represents a massive opportunity for rideshare companies to prioritize electrification.
At the moment, less than one percent of rideshare miles are driven in an electric vehicle. The barriers to adoption for these drivers are the same as for the average consumer: the up-front vehicle cost, range anxiety, worries about charging costs, and concerns about where to charge. An important difference, however, is that according to a study from the World Resources Institute (WRI), rideshare drivers are traveling three times farther per day than the average private car owner. This means that both the financial and time-related costs of charging EVs can be significant, cutting into drivers’ potential earnings and disincentivizing them from making the switch. If we want to meaningfully reduce transportation emissions, we need to remove the barriers for rideshare drivers to access electric vehicles as well as reliable, convenient, and affordable charging.
The WRI report found that an overwhelming majority of rideshare drivers are lower-income individuals, and that while tax credits are available, 70 percent of those went to households that would have bought an electric vehicle anyway – not to those who need to cut down on their work-related expenses. Data indicates that people with lower incomes tend to own older, less fuel-efficient vehicles. Further, the policy landscape for EV incentives can be confusing to navigate, and the payback period for investing in an electric vehicle is not immediate. For drivers who are able to purchase or already own electric vehicles, range anxiety and other charging concerns persist. Drivers may be forced to charge at home, which can be costly and prohibitive to set up, or take them off-route to find a public charging location where recharging can also come at a premium.
One of the best ways to accelerate the adoption of electric vehicles for ride-hailing services will be to ensure that charging stations are available when, where, and at the prices that are needed. Instead of treating drivers as individual entities, ride-hailing companies can provide access to reliable charging solutions analogously to how owned fleets are developing charging hubs today. By taking a “fleet-centric” approach, forward-looking rideshare companies can help make large-scale charging possible, while working within the constraints of the unique use cases of their driver-partners.
For example, rideshare drivers often don’t pass by truck stops or travel through major highway corridors, since they typically drive in urban areas where they need to make frequent stops at specific points of interest. Providing drivers with access to amenities like food, bathrooms, and parking during a charging session can help rideshare companies attract and retain drivers, while helping to boost the adoption of electric vehicles. Taking into consideration the routes that these drivers cover, as well as their personal needs, can inform charging infrastructure development and showcase how ridesharing companies understand and can respond to the needs of their drivers.
At Terawatt, we believe that the soon-to-be trillion-dollar market for ridesharing can be a major driver of reducing vehicle emissions and creating a cleaner, more equitable transport system for all. That’s why we’re focused on helping ridesharing companies – along with all other types of fleets – embrace the electric transition by owning, developing, financing, and operating EV charging assets for them.
In some areas, the electrification of ridesharing is already well underway. For example, in California, ridesharing companies have specific state-mandated targets for reducing greenhouse gas emissions. The good news is that charging infrastructure for ridesharing can be less energy-intensive than that required for commercial trucking fleets, meaning charging site development timelines can be quicker. That said, developing charging hubs in and around urban areas in a way that takes into account common routes, usage trends and additional on-site amenities requires significant expertise to control energy costs and ensure reliable operations. But that’s why TeraWatt was born. We’re here to be the crucial link between capital markets, utilities, and organizations of all types looking to electrify their fleets, including our friends in the ridesharing industry.
To learn more about our solutions for ridesharing and other companies, please get in touch with the Terawatt team here.