Published on January 7th, 2021 |
by Rocky Mountain Institute
January 7th, 2021 by Rocky Mountain Institute
CleanTechnica editor note: We will be conducting a podcast interview with Lyft’s Director of Sustainability, Sam Arons, in the coming week. CleanTechnica Members, Supporters, & Ambassadors will get early access to the recording prior to it publishing on our podcasting channels. Several of the issues below, as well as others, will be discussed in the interview.
Transportation network company (TNC) fleets, like Uber and Lyft in America, Didi in China, and Ola in India, may account for a relatively small share of the number of total automobiles on the road globally. But don’t let that fool you. Electrifying ridehailing has outsized potential to reduce emissions and catalyze electrification in other transportation sectors. To stay on target for limiting global temperature rise to 1.5°C — something RMI believes will take the electrification of well over 50 million EVs in the United States by 2030 — we must exploit every opportunity possible, including electrifying TNC fleets.
TNC vehicles are high-mileage, meaning that electrifying one can have the same emissions reduction benefits as electrifying three passenger vehicles. In addition, TNC electrification can catalyze similar transitions in other transportation segments by serving as critical anchor tenants for public DC fast-charging (DCFC) stations and introducing customers to EVs — valuable for public education and awareness.
There is reason to believe that a transition to EVs for TNCs is possible. All of the major TNCs have, in some way or another, committed to vehicle electrification. Both Uber and Lyft have committed to 100 percent electrification by 2030, Ola has committed to 40 percent electrification by 2026, and Didi already has hundreds of thousands of EVs operating on its platform.
But despite positive tailwinds, the path for TNC electrification is not fully paved. In RMI’s latest insight brief, Racing to Accelerate Electric Vehicle Adoption: Decarbonizing Transportation with Ridehailing, we find that EVs are already technologically capable of performing ridehailing duty cycles and their cost competitiveness with conventional gasoline vehicles is nearing a tipping point. However, the charging infrastructure needed for their success needs to be rapidly scaled to meet their charging demands.
To accelerate the electrification of this industry, multiple stakeholders, including utilities, regulators, automakers, municipalities, and TNCs, must align their interests and work together. In our insight brief, we investigate the reality of TNC electrification barriers using more than 100 million miles of real vehicle data from the Maven Gig platform, in collaboration with General Motors. We also outline some of the key ways these stakeholders can contribute to the transition.
Ensuring EVs Are a Good Investment for Drivers
A TNC driver’s living is based, in large part, on the cost of owning and operating the vehicle. If drivers are going to make the decision to switch, EVs must cost the same upfront or cost significantly less to own and operate than conventional gasoline vehicles.
There are many factors working in favor of lower costs for TNC EV drivers. Maintenance costs are lower for EVs and, according to our analysis, ridehailing wages lost to charging times are negligible when operating in cities with robust infrastructure. But despite these advantages, we find that the price that TNC EV drivers pay for charging can be a deal-breaker for cost-competitiveness.
Full-time TNC drivers who rely heavily on public DCFC can end up paying charging prices that are on par or even higher than what they would pay for gasoline. This eliminates the operating cost-savings typically associated with EVs. Without an operating cost advantage, it will be very difficult to get TNC drivers to buy EVs that are already more expensive upfront than gasoline vehicles.
One of the first steps that can be taken to reduce this effect is simply to increase level 2 (L2) charging access for drivers at home. L2 charging involves a relatively low capital investment and provides charging at residential electricity rates, which are generally much cheaper than refueling by gasoline.
The problem is that TNC drivers have disproportionately low access to L2 charging because they tend not to live in single-family dwellings and/or lack private parking. If access to L2 charging can be increased — for instance, by installing L2 at multi-unit dwellings — it can go a long way to making EVs cost-competitive for TNC drivers. For the remaining drivers where L2 charging installation will be difficult if not impossible, cost-effective public DCFC is a necessity.
To promote cost-effective DCFC, utilities can redesign tariffs to promote, rather than penalize, early-stage EV growth. Doing so can reduce the cost of electricity to public DCFC providers and give them more room to pass on those cost savings to consumers.
Additionally, because of the mutual benefits between TNC fleets and charging providers, discounts can be given to TNC fleets while still generating profit for charging providers. Capitalizing on this mutual benefit, Uber and EVgo have recently announced that Uber drivers will receive up to 25 percent off standard EVgo charging rates — something we believe will have a positive impact on TNC EV cost-competitiveness.
TNC Drivers Need Ubiquitous Public Charging Infrastructure
While EV cost-competitiveness is necessary, it is insufficient to trigger large-scale electrification without a massive deployment of public charging infrastructure. TNC vehicles especially depend heavily on public charging infrastructure due to their lack of access to home charging and their high daily mileages, which makes public fast-charging critical for serving customers. While infrastructure in the United States has been improving in recent years, it is still inadequate to meet the potential demands of ride-hailing fleets.
To build ubiquitous public infrastructure for TNC fleets, everyone must work together. State and municipal governments need to provide incentives for charging station construction and streamline planning and permitting approvals, and utilities need to invest in make-ready infrastructure for public charging stations and simplify the grid interconnect process.
Meanwhile, TNCs and charging providers need to find ways to collaborate to make charging cost-effective and profitable. To create this win-win, the chargers must be located and sized to support current and future ridehailing demand. To this end, RMI is developing a package of analytical tools to help stakeholders site charging infrastructure for TNCs intelligently.
We Cannot Let Up on the Gas (or Pedal)
If we are to limit global temperature rise to 1.5°C, we need to exploit every possible opportunity to accelerate transportation electrification, including electrifying TNC fleets. There are promising tailwinds for TNC electrification: municipalities, EVSE providers, utilities, regulators and TNCs themselves are beginning to align on the goal and are testing ways to make it happen, but the work is far from done.
TNC vehicles still face the challenges of becoming cost-competitive with conventional gasoline vehicles and gaining access to sufficient charging infrastructure. To combat these challenges, all of the above stakeholders need to work together, implementing solutions of the type laid out in our insight brief. If they can work quickly, not only will your next ridehailing experience be electric, the entirety of transportation decarbonization might be much further along.
Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica member, supporter, or ambassador — or a patron on Patreon.
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.