Rideshare Startups Failed Our Climate, but It’s Not too Late to Reroute

Mass EV adoption could make a meaningful climate impact. But first we need to address some key challenges.

It’s amazing how much can change in a decade. This year marks the tenth anniversary of the first passenger pickup by Sidecar, a company I founded that pioneered the concept of modern ridesharing. Although Sidecar no longer exists, the industry it helped create is thriving and used by millions of people every day. The rideshare industry has had an enormously positive impact on our day-to-day lives by lowering the barrier to intracity travel and creating thousands of jobs for drivers. In this sense, it’s been a tremendous success. But when I look back at the industry I helped create, it’s hard not to focus on the area where it has been an unmitigated failure: reducing our carbon footprint.

Electric vehicle rideshare

When I founded Sidecar and previously incubated Getaround, I thought that it would be possible to reduce vehicle emissions by fundamentally changing our relationship with cars. I thought that sharing our cars would result in less driving overall and a corresponding reduction in greenhouse gas emissions. I couldn’t have been more wrong. What happened instead was that ridesharing expanded the ride-hailing market and people began traveling in cars more than ever before.

This realization is what ultimately led me to found Spring Free EV last year. By that point, it was clear that gig driving wasn’t going to reduce the world’s carbon footprint on its own. Yet, it also seemed possible to reroute the ridesharing ecosystem toward a carbon-free future. The key is to reduce the upfront costs of electric vehicles to accelerate mass adoption. EVs have a much lower lifetime cost than internal combustion engine (ICE) vehicles when fuel and maintenance costs are taken into account. Still, EVs are priced about $10,000 higher than ICE vehicles on average.

What EVs Can Learn from the Solar Industry

Home solarIt’s a new idea for financing a car, but it’s an approach that has been proven to work in other industries. A great example is residential solar power. Historically, it’s been very expensive to install solar panels on your roof. Although going solar will save you money on electricity in the long run, it typically takes a decade or more for those savings to materialize. This proved to be a major barrier to consumer adoption.

About a decade ago, several companies like Sunrun and Solar City began to sell residential solar-like cloud software. Homeowners could get solar panels installed for little or no upfront cost and pay for them over the course of years or decades. The impact of this shift was enormous and residential solar has grown from a few hundred megawatts in 2010 to more than 20 gigawatts today.

If we lower the upfront costs of EVs, more people will buy them. It’s that simple. The big question is where we start.

From Ridesharing to Your Garage

The climate crisis is only getting worse and electrifying ridesharing fleets is one of the fastest ways to decarbonize transportation while demonstrating the effectiveness of a new financing model. This, too, follows in the footsteps of the solar industry. It began experimenting with financing agreements at the commercial level with power purchase agreements before moving to direct-to-consumer leasing arrangements.

There is a clear business case for fleet owners to adopt alternative financing approaches to electrify their vehicles. But consumers think about a lot more than the bottom line when they’re buying a car and these decisions are ultimately what will influence mass EV adoption.

One major area for improvement is charging infrastructure. Range anxiety is frequently cited as one of the biggest concerns that car shoppers have with EVs. No one wants their car to run out of juice in the middle of a cross-country road trip. Apartment buildings and condos are also ripe for EVs but need charging infrastructure. The solution is a significant investment in public charging infrastructure so that topping off an EV is as easy and accessible as filling a gas tank. The Biden Administration’s recent commitment to spending $5 billion on a national charging network will go a long way toward this goal, but it won’t be sufficient on its own. An analysis released last year suggested that the US will have to invest $39 billion in public charging infrastructure to achieve 100% EV sales by 2035.

We can improve the price subsidies, which make a big difference to consumers’ choice of EVs versus fossil-fueled cars and trucks. Today’s subsidies are mainly used by wealthy households who drive less than average miles. We can shift those subsidies to high-mileage drivers through ideas like those proposed by the non-profit, Coltura and by expanding the IRS benefits for EVs. Just 10% of US drivers burn 32% of the gasoline. Instead of subsidizing EVs for $7,500 even if they sit in a garage, we should provide a tax credit for each mile they drive the first year that they own the vehicle. We can use the IRS standard mileage deduction rate that is used for business expenses today. In 2021 it was 56 cents a mile. If that amount was allowed for any new EV driver for all their first-year miles, the average high-mileage driver would get $16,800 off their tax bill. It would help reduce the pain of gas prices, reduce the cost of EVs, and have a bigger impact on greenhouse gas emissions than the current subsidy.

Another important area for progress is consumer education. Recent research shows that most consumers are still confused about the basics of EVs like the differences between car models and the cost of ownership. One way to improve consumer awareness of EVs is by lowering the barrier to comparison between various electric makes and models as well as ICE equivalents. This is where tools like the Department of Energy’s EV comparison guide can make a big impact by showing consumers how much they can save each year by switching to EVs based on their personal car use.

Chevy Volt rideshare

As I write this, it seems abundantly clear that we’re at an inflection point in the EV adoption curve. The current fast trajectory, however, is not enough to achieve our climate goals. We need to do more to achieve net-zero emissions. What happens next is ultimately up to us. Everyone from consumers and gig drivers to the owners of auto fleets has a role to play in this transition, and we need to use every tool at our disposal to make it happen. We must act with urgency today to build the world we want to live in tomorrow. A lot can change in ten years—and the clock is ticking.

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