The gig economy has conquered the global taxi market, with ride hailing apps like Uber and Lyft surpassing 50% of all rides in 2019. However, they have done a poor job of improving the environment—in fact, many believe with added idle times waiting for fares, compounded by attracting riders off public transportation with cheap rides, that the gig industry is actually making carbon emissions worse.
The question today is—can electric vehicles (EVs) put the gig economy back in the green?
As Gig Work Grows, So Does The Carbon Footprint
In today’s crazy, unpredictable world, the allure of gig work is undeniable. The promise of flexible work schedules, unlimited time off, control over earnings, and the ability to work away from an office setting drew millions of workers to gig platforms. Since its inception in 2009, the gig economy now claims 3% of US adults use gig platforms as their main job.
Yet, only 0.5% of these cars are EVs.
With the rise of gasoline costs, which have jumped more than 43% in the last year, one would consider switching to an electric vehicle (or EV). Yet growth in the EV market remains stagnant, much to the dismay of environmentalists and gig companies, alike.
So why, with evidence that electric vehicles would benefit their bottom line, are gig workers still clinging to the gas guzzlers? In short, they can’t afford not to.
Issues with Purchasing Electric Vehicles in Years Past
The first challenge for ride-hailing drivers is that they must provide their own vehicle, and the premium price tags on EVs is simply too high for their meager start up budgets. EVs are viewed as an unattainable luxury for the majority within this field.
With the starting sticker price of an EV well above the average gas engine, the initial down payment is naturally higher—precluding many from even considering operational costs.
Buyers can’t even cut the cost of purchasing an electric vehicle by looking for a used model. Used EVs are notoriously scarce, unless you’re looking to buy older models with lower ranges.
Range and limited locations for charging also factored into many decisions, making it difficult for high mileage drivers to consider practical. However, progress in both of these areas make this less of a factor today. EVs typically support a range of 250-300 miles per charge, and can typically charge up to 80% in 30 minutes at Level 3 chargers. Combustion engine cars have an average range of about 400 miles, and while you can fill your tank in 5 minutes, the cost is becoming prohibitive.
What Has Changed?
In short, the math of EV ownership is significantly better today. With the practical side of driving range and charging networks already on the rise, recently the auto industry, business sector and federal governments made huge strides to improve the financial side of the decision in favor of EVs.
The auto industry is working aggressively to bring out more models, better features and driving down costs by ramping up—and entirely switching manufacturing—over to EVs. Tesla’s Elon Musk is even considering expanding into the lithium market to drive down the cost of batteries.
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.
— Elon Musk (@elonmusk) April 8, 2022
The US government is also actively encouraging growth in this sector in a big way. Working the problem from both sides, they created financial incentives to pull in buyers, and poured billions into accelerating the building up of critical infrastructure to make EV usage more practical. For instance, the U.S. Department of Energy offers tax credits of up to $7,500 for each electric car purchased. The Biden-Harris Administration enacted the Electric Vehicle Charging Plan which put a massive $5B fund to work accelerating the installation of 500,000 chargers, creating a nationwide network.
Finally, companies like Spring Free EV successfully reshaped financing to make EV ownership tenable. Programs tailored for gig workers, like the Free EV program make EV ownership truly accessible for anyone who wants to buy. In this program, upfront cost of EVs drops from $4,500K down to $0 and forgoes the often disqualifying credit check.
Free EV also unleashes the earning potential for vehicles. Most leases charge per mile over 10,000 miles. The Free EV program caps additional mileage charges, allowing professional drivers to increase profitability with no penalties at the end of the term. For any driver who regularly goes over 3,000 miles per month, the economics swing undeniably in Free EV’s favor.
Refueling economics also changed. Today, the average gas-powered car with a 12 gallon tank costs about $50, and offers a range of about 350 miles. Last year, that car only took $35. That big of a jump will cause anyone to search for alternatives, particularly those who fill up frequently each week.
An EV, with a 75 kwh battery will cost about $10, albeit with an average range closer to 300 miles. Refueling still takes more time, but more than 95% of EV owners exclusively recharge overnight at home. So, in reality they are more likely to avoid that pitstop entirely than spend any additional time or energy traveling to a charging station.
This means that those who rely on driving to perform their job tasks, like Uber and Lyft drivers, can continue to earn money while seeing their costs plummet.
It also stands to mention that there are still the benefits of owning an electric vehicle that have never waivered. For example, maintenance has always been a lower financial burden for electric vehicle owners—without violent combustion happening in the engine every second, wear and tear is negligible on these typically sturdy vehicles. And of course the quiet ride without the smelly carbon emissions, makes each trip more enjoyable.
The Future of EV
The economics of going green are becoming more profitable for the gig worker every day. For now, anyone driving over 3,000 miles per month should switch for financial reasons alone, without factoring in rebates or other incentives.
Electric vehicles are on the rise and only expected to go up from here. Businesses and governing bodies, alike, are cooperating in creative ways to neutralize our average of 40 gigatons of C02 emissions annually. Real change is rippling through the industry—making EVs the smarter choice on all fronts, which is a win-win for environment and entrepreneur alike.
If you’d like to find out more about Free EV, the financing option designed for gig workers in mind, click here!