A lot of excitement has followed the launch of viable plug-in electric vehicles such as the Tesla model S, and more recently, the first all-electric Porsche, and it looks like the business case for electrifying ride-hailing services such as Uber and Lyft is stronger than ever.
At present hybrid vehicles are the most economical clean transport choice for drivers of these services, but a recent report by the International Council on Clean Transportation projects that long-range electric vehicles will be the cheapest option by 2025.
According to the report, the shift will be driven by more cost-effective batteries and advancements in charging infrastructure, set to include options like cheap overnight charging.
The trend has drawn interest from companies like Culver City California-based Envoy Technologies that see the ride-hailing sector as an opportune market for EV’s.
Envoy is a community-based EV sharing platform which includes hotels, apartments and business around California, and the company is currently piloting programmes that allow customers to use its cars to drive with Uber, Lyft, and other ride-hailing companies.
According to co-founder Aric Ohana: “In the past, the range of the vehicles wasn’t that far, that’s number one,” he said. “It was below a 150-mile range for the majority of vehicles. Number two, the infrastructure was not in place. Both those components are really changing this year.”
The International Council on Clean Transportation report predicts that adoption will be even more rapid than previously thought: “The future is bright for electrifying the ride-hailing companies even though today they clearly are not all that electrified,” said Nic Lutsey, programme director and report co-author.
Government policy can play a significant role by encouraging the development of electric charging infrastructure. That could hugely impact the market, and the California legislators have already passed bills to do so.
California leaders passed a bill last last September designed to encourage ride-hailing companies to adopt zero-emission cars. The law, SB 1014, directed state regulators to design a policy to electrify “transportation network companies” or “TNCs” to reduce their emissions.
The potential is significant. In San Francisco alone, TNC’s account for 570 000 miles travelled every weekday. A policy that drives TNC’s to electric vehicles could have a huge impact, according to Lutsey. “Obviously that would be dramatic in terms of how the TNCs would have to change their practices and think more proactively about where all their drivers are and whether they are charging,” he said.
This could be great for a company like Envoy, which has a large inventory in a range for communities.”
According to Richard Steinberg of Electrify America, the electrified ride-hailing model market presents a huge opportunity to choose electric vehicles and build a nationwide charging network with a $2 billion share of market from Volkswagen’s diesel emissions settlement.
“Utilisation is key to our profitability,” Steinberg said. “These stations are pretty expensive to install, and they have a limited number of charges per day. It’s tough to earn a profit. But the kind of driving patterns and fast charge needs that car-sharing fleets and taxi fleets need will drive our utilisation to where we’re really looking at this is a key area for us to drive our profitability.”
The report notes that whilst researchers found a compelling case for ride-sharing drivers to make the change to plug-in electric vehicles, policy must support innovation in the industry.
“Even with the positive economics, ride-hailing fleet electric uptake is largely in city-specific pilots,” researchers wrote. “Even when electric vehicles reach hybrid ownership cost, companies will need to deploy charging networks, with policy support, to meet the specific charging needs of growing ride-hailing fleets.”