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California proposes electric vehicles standard for rideshare companies

California proposes electric vehicles standard for rideshare companies

California’s quest for a cleaner, greener environment is making its way to the rideshare services like Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT). The California Air Resources Board (CARB) issued a draft proposal Wednesday that calls for nearly all rides in transportation network companies (TNC), commonly known as rideshare services, to be in electric vehicles by 2030.

The Clean Miles Standard is scheduled to be voted on by the full CARB board on May 20.

The report cited the growing need to regulate transportation emissions, and the likely growth of rideshare services in the state. In 2014, vehicle miles traveled (VMT) by TNCs represented just 0.05% of total VMT, but that had grown to 1.2% by 2018, with Uber and Lyft accounting for the majority of those miles.

“The TNCs are well positioned to help state and local agencies meet air quality and climate goals through electrification. In fact, the two largest TNCs in California, Uber and Lyft, have already been at the forefront of experimenting with electrification through various pilot programs in the U.S. and globally,” the report said.

The CARB proposal is in response to Senate Bill 1014, which directs the agency and the California Public Utilities Commission to implement a clean miles standard for TNCs in the state.

Lyft has announced a goal to have 100% of rides conducted in electric vehicles by 2030 and is a member of the Climate Group’s EV100 initiative to accelerate the transition to EVs. The company said it has supported California’s Clean Miles Standard and Incentive Program as well as an economywide price on carbon, low-carbon fuel standards and an extension and expansion of zero-emission vehicle programs and incentives for electric vehicles. The company has been engaged with the Clean Miles Standard efforts for two years.

“With transportation being the largest source of planet-disrupting greenhouse gas emissions in the country, we believe now is the time to set aggressive goals,” Sam Arons, director of sustainability for Lyft, told Modern Shipper in a statement. “That’s why last June we made the industry-leading commitment to reaching 100% electric vehicles on the Lyft platform by 2030, and we look forward to continuing our work with CARB on the Clean Miles Standard and Incentive Program.”

Like Lyft, Uber has conducted electric vehicle tests in California, offering incentives and added benefits for drivers with EVs. It has also announced a 100% electric goal by 2030.

Under the Clean Miles Standard, TNCs would be required to conduct 2% of their VMTs in electric vehicles by 2023, ramping up to 30% by 2026, 50% by 2027 and eventually 90% by 2030. The agency believes this rule would cumulatively reduce particulate matter by 93.21 tons, nitrides of oxide (NOx) by 298.03 tons and greenhouse gas emissions by 1.81 million metric tons of carbon dioxide.

Read: Lyft sees its future, and it is autonomous and B2B focused

“To comply with this regulation, TNCs need to work with their drivers to enable ZEV adoption,” the CARB report said. “While we do not know the exact strategies TNCs will use, nor how the TNC business models may evolve in the future, staff have taken a conservative approach in selecting annual targets by assuming that drivers would acquire ZEVs and that low-income drivers, particularly those who live in communities of concern, would acquire ZEVs.”

CARB also estimated the drivers themselves would see a one-year payback period on the purchase of the electric vehicles.

A Consumer Reports study of electric vehicles, released in October 2020, found that EV owners could see substantial savings the longer they own the EVs. Fuel savings alone can top $4,700 over the first seven years, the publication noted. The average savings over a 200,000-mile life cycle of the vehicle ranged from $6,000 to $10,000.

“No matter how you look at it, the massive lifetime savings potential of EVs could be a game changer for consumers,” Chris Harto, Consumer Report’s senior policy analyst for transportation and energy, and the leader of the study, said. “As battery prices and technology improve, prices come down and more attractive models hit the market, it’s only going to get better.”

Breaking down the costs further, Consumer Reports found that the average EV owner saved between $800 and $1,000 per year in fuel over an equivalent gas-powered car and $4,600 in maintenance over the life of the vehicle.

Electric vehicles account for roughly 2% of new vehicle sales in the U.S. Ford (NYSE: F) and General Motors (NYSE: GM) are among automakers moving to electric-vehicle lineups. Prices are coming down as well. Tesla has announced a $25,000 price tag for a new model later this year.

Click for more Modern Shipper articles by Brian Straight.

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1 April 2021, 17:30