An electric Uber cruises in KievGetty Images
Last week, Uber UBER followed up Lyft LYFT by announcing that all Uber rides by 2030 would be electric. It’s a lofty goal, and they are pledging resources to it, including giving drivers $1.50 extra per ride (riders pay $1 for an Uber Green) and providing funds to help people convert. They say they will commit “$800M of resources” by 2025.
The problem of course, is that Uber doesn’t own the cars in its fleet. It has to convince Uber driver/owners to switch to electric cars. In my earlier article, “Why isn’t your Uber electric?” I outlined some of the barriers to this. After all, electric cars are much cheaper to operate — cheaper energy, lower maintenance — than gasoline cars, so people driving all day get an obvious financial win by driving the lowest operating cost cars around, even though the cars today are expensive. Here are some of the problems and what Uber might be able to do about them.
One of the dark secrets of Uber/Lyft is that many drivers are not fully savvy on the math of operating their car. They may make about $1.50/mile they drive, but some of them only look at the raw operating cost — gasoline — and figure they are getting good pay for their time. The problem is that fuel can be just a quarter or even less of the cost of running a car. They might figure, “sure the car is depreciating and maybe I have to take it in for service more often” but they don’t see those costs while they drive. It’s a win for Uber to have drivers think they are better paid than they are. It’s also partly true, in that some of the depreciation is just by the year, and the owner/driver is already taking that upon themselves even if they don’t drive.
All of this goes away if the driver has to rent or lease a car just for gig-driving. Then they get a monthly bill for the car that includes everything and will compare it to what they made and how many hours they worked (or sat idle waiting for rides.) As many studies have pointed out, that’s not so nice a number, though it’s still a job.