New rules adopted by California’s clean air regulator mandating nearly all trips on Uber’s and Lyft’s ride-hailing platforms have to be in electric vehicles over the next few years on Thursday.
California is the first state in the nation to require that nearly all the miles travelled by ride-hailing drivers take place in electric vehicles by 2030.
The mostly low-income drivers, as the companies themselves say may not be able to afford to switch to EVs on their own. Electric vehicles remain more expensive than their gas-powered counterparts. They also require charging stations, which could be prohibitive especially for drivers who live in multifamily units.
Electric vehicles cost between $50,0000 to $300,000 and they take hours to fully charge the battery.
The California Air Resources Board on Thursday approved the new rules, which means Uber Technologies Inc. UBER, -1.03% and Lyft Inc. LYFT, +0.69% will need to ensure that most of their driver’s transition to EVs in this decade. The next step is for the California Public Utilities Commission to finalize how the rules will be implemented.
The remaining question is who will pay. Despite their approval of the measure, the board members said Thursday they are extremely concerned about low-income drivers having to bear the majority of the costs and expressed the need to continue to collect information on how this will affect them.
Uber and Lyft consider their driver’s independent contractors, and the drivers own or rent their vehicles. The companies, which are unprofitable but valued at billions of dollars, want the state to share the costs by providing incentives. The bill, as estimated by the Union of Concerned Scientists, could total $1.73 billion, which is also forecast could cost the companies 4 cents a mile.
Electric vehicles are expensive and charging them is a total hassle.
“Yes, drivers own their vehicles, but they’re operating on these platforms that are generating extra emissions,” said Elizabeth Irvin, senior transportation analyst for the Clean Transportation program at the Union of Concerned Scientists, in an interview before the vote. “It’s critical that [the companies] do their part.”
CARB member Nathan Fletcher said during the discussion before the vote that “We don’t have a mechanism to ensure that this doesn’t just get passed down to the drivers.” He added that “an industry based on labor exploitation will be asking for subsidies to address the environmental impacts that they’re profiting from.”
All other CARB members who were present for the vote echoed those concerns.
“I’d be remiss if I didn’t mention how Proposition 22 has worked out in making sure drivers are protected,” said Davina Hurt, referring to continuing concerns that ride-hailing drivers are not adequately compensated or protected after California voters approved in November the ballot initiative that allows Uber, Lyft, and other gig companies to continue classifying their workers as independent contractors.
Included in the new standards are credits for TNCs related to investments toward charging infrastructure, or for transit rides booked through their apps, although some board members weren’t supportive of credits for Uber and Lyft at all.
“Credits aren’t necessary for companies that can spend $200 million on a proposition to avoid supporting their drivers,” Diane Takvorian said, referring to how much gig companies, including Uber and Lyft, spent to support the passage of Prop. 22.
It’s not just the board members who are calling for Uber and Lyft to bear the costs of electrifying their ride-hailing fleets. Representatives of environmental groups also spoke up before the vote and urged the same thing.
“These companies must and absolutely can pay, not drivers,” said Sam Appel of the BlueGreen Alliance. “They are well-capitalized to do so.”
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