How Policymakers Can Help Electrify Ride-Hailing Services

As the ride-hailing industry has grown, so has concern about the tailpipe emissions from thousands of Uber and Lyft trips.

Consider that:

• Uber and Lyft make up as much as 14% of all vehicle miles traveled in urban areas.
• Ride-hailing trips may increase emissions by replacing some mass transit or walking/biking trips.
• Ride-hailing increases overall miles traveled because drivers must pick up passengers or return from a drop-off.

Electrifying ride-hailing vehicles would help reduce greenhouse gas (GHG) emissions and air pollutants. Uber and Lyft, which together make up 99% of the U.S. ride-hailing market, have committed to electrifying their fleets. And state and local policymakers are looking for ways to speed up the change.

Here are three key considerations for effective policies to rapidly electrify the ride-hailing sector.

 

1. Adopt electrification requirements for ride-hailing companies.

Some jurisdictions have already adopted policies that require ride-hailing companies to electrify an increasing percentage of their fleets and reduce emissions. In 2018, California Gov. Gavin Newsom signed SB 1014, the Clean Miles Standard Act, which directs ride-hailing companies to ensure their fleets achieve zero GHG emissions and 90% electric miles driven by 2030. In March 2024, the California Public Utilities Commission (CPUC) issued the Phase 1 Decision to Implement the Clean Miles Standard Program. The decision directs ride-hailing companies to develop plans detailing their progress toward lowering GHG emissions from their operations. The plans will help ensure ride-hailing companies are on track to meet their goals and provide regulators with visibility into these efforts.

Others are exploring ride-hailing electrification policies. For example:

• The Washington EV Council has proposed establishing GHG emissions reduction targets for ride-hailing fleets as part of a statewide Transportation Electrification Strategy.
• The New York City Taxi and Limousine Commission has adopted the Green Rides Initiative, which will require 100% of ride-hailing trips to be by zero emission vehicles (ZEVs) or wheelchair-accessible vehicles by 2030, with interim targets beginning in 2024.

Cities are well-positioned to lead this effort since many ride-hailing trips are concentrated in urban areas and contribute significantly to localized air pollution. Ride-hailing electrification is underway in cities around the world, including Amsterdam, Hanoi and London.

 

2. Provide incentives for ride-hailing drivers to adopt electric vehicles (EVs)

In addition to electrification requirements for ride-hailing companies,  EV adoption incentives should also be made available for ride-hailing drivers, many of whom own, rent or lease their vehicles themselves. These incentives would reduce electrification costs for drivers, who are often lower-income earners and part-time workers.

Specifically, one-time and ongoing incentives should defray part of the cost of buying, leasing and charging an EV for ride-hailing drivers. As part of its implementation of the Clean Miles Standard, the CPUC has established a suite of incentives including:

• An upfront new EV incentive to defray part of the purchase or lease cost of a new ZEV, as well as charging costs.
• An upfront used EV incentive to defray part of the purchase or lease cost of a used ZEV, as well as charging costs.
• An incentive to cover the cost of residential charging equipment or a prepaid card for public charging that can be received annually for up to four years.

Incentives for public charging are important because many ride-hailing drivers lack access to home charging. They need to charge more frequently at public charging stations, which costs significantly more than home charging. A variety of incentives gives drivers options to address their individual needs.

 

3. Support the widespread deployment of EV charging infrastructure.

Another key element in electrifying ride-hailing fleets is providing reliable publicly available charging infrastructure.

Deploying chargers in locations convenient for ride-hailing drivers can be complicated. Many drivers live in communities that are currently underserved by public charging. They may not want to buy EVs until there are chargers near where they live or drive. But charging developers often wait for new demand, indicated by EV registrations, which do not indicate where the vehicles are in use, before deciding where to install chargers.

Ride-hailing companies can help solve this problem. They have the data indicating their drivers’ most popular travel routes. By sharing trip data with regulators and charging developers, ride-hailing companies can help identify optimal charging sites where there would be consistent, predictable charging demand. The development of charger sites can then support current and future ride-hailing drivers and other EV owners.

 

Incentivizing electric vehicle ride-hailing

State and local policymakers can facilitate ride-hailing electrification, and reduce harmful tailpipe pollutants by, adopting electrification requirements, providing financial incentives to ride-hailing drivers to help them adopt EVs, and supporting the deployment of charging infrastructure.