How Taxi Companies Can Gain a Competitive Advantage by Greening Their Fleets
With a population of approximately 36.7 million people, there are over 23,000 taxi companies in Canada, operating some 30,000 taxicabs. Now, just imagine how many taxi companies there are around the world. The industry has had a challenging 5 years leading to 2017, with plummeting commodity prices creating challenging macroeconomic conditions. These conditions are putting pressure on taxi companies to increase their profit margins by reducing operational costs.
One of the most effective ways that taxi companies can reduce their operating costs is by switching appropriate vehicles within their fleets to electric. This offers businesses not only significant fuel savings, but also lower service, maintenance, and repair (SMR) costs compared to conventional gas or diesel engine vehicles.
Supporting this business case, Nissan announced in 2016 that six of the largest electric taxi fleets in the UK had surpassed three million miles between them, calculated as saving the firms a collective £290,000 ($384,000 USD) in running costs.
A growing number of taxi fleets are making the move to electric; particularly in Europe where 2015 saw a 66% year-on-year increase in electric vehicle (EV) taxi sales.
Worldwide EV Taxi Operators
In Europe, Amsterdam Schipol Airport has a fleet of 167 Teslas to bring passengers to and from the airport. The vehicles are run by three different operators, including ‘Taxi Electric’,
the first private taxi service to switch to 100% electric vehicles in 2011.
And in Montreal, electric taxi company Téo currently has a fleet of over 110 Nissan LEAFs, Teslas and Kia Souls. In September they announced plans to expand their fleet to 350 all-electric vehicles. The company launched in November 2015 and as an indication of consumer’s appetite for the service, it had amassed 70,000 registered users within 9 months.
Environmental Impacts of Taxi Companies
Currently, the majority of taxis in Canada and North America are powered by internal combustion engines (ICE). When nitrogen and oxygen react together during the combustion of the fuel, these vehicles emit nitrogen oxide (NOx). Nitrogen oxide is a major source of air pollution, affecting the health of people in local communities and contributing to ozone layer depletion.
Carbon dioxide (CO2), a leading cause of climate change is also released in great quantities from ICE vehicles. A study of New York taxis using the EPA’s carbon calculator found that the average taxi emits more than 100,000 pounds of CO2 every year. Summed across the entire fleet of over 12,000 taxis, it would require 500,000 acres of pine forests storing carbon to compensate for these annual emissions.
The Canadian Taxi Association has responded to these environmental impacts by making one of their key priorities to promote better environmental practices and vehicles.
Legislation Enforcing the Replacement of ICE Vehicles
Cities across the globe are facing considerable challenges to improve poor air quality and reduce greenhouse emissions. With thousands of people dying early every year, pollution in city centers is considered a public health priority. To tackle this, Paris will ban ICE vehicles by 2030 and London will require that all new taxis licensed from January 2018 are zero emissions capable. The new plans include ‘zero emission’ taxi ranks for electric vehicle drivers, together with a network of rapid charge points. And where big cities lead, others soon follow…
Taking a Harder Line on EV Adoption
The business case for taxi companies to begin replacing existing ICE vehicles for electric is growing. This will ensure that companies are able to meet growing consumer demand and preempt restrictive legislation.
But with a wide range of vehicles available, taxi companies must carefully select the vehicles they add to their fleet. ‘Right-sizing’ EVs for their duty cycles is fundamental to ensure a positive return on investment. This is why operators must have access to comprehensive fleet data to help them make informed purchasing decisions.
EVSA for Taxi Fleets
FleetCarma’s Electric Vehicle Suitability Assessment (EVSA) is the only solution that allows you to accurately forecast fleet performance before you make any investment in EV deployment.
We collect high-quality vehicle-side data from your entire fleet of vehicles, analyzing and running efficiency diagnostics to produce a final independent report. This report allows you to forecast the effects of your purchasing decisions before you make them. It also supports budgetary decisions by accurately forecasting ROI.
This allows you to:
- Forecast fleet wide savings
- Understand the total cost of ownership per vehicle
- Evaluate multi-year procurement plans, tailored to your fleet
- Forecast the reduction of GHGs based on possible fleet compositions
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