How Uber’s Electric Car Experiment Will Change the Taxi Industry

October 13, 2016

Both supporters and opponents of ride-hailing companies (or ride-sharing, whichever one you’d like to call it) agree on one thing: Uber and its competitors changed the way we travel. Looking back at how it happened, the advantages of such a service are clear:

• Convenience: Know the when, where, what and how, as opposed to the mystery involved with a conventional taxi service
• Affordability: Know what it costs before you ride, and see how it’s often more affordable than a taxi
• Personalization: Do it all on your smartphone with the choice of vehicle type, driver and number of riders in the car

Of course, the drawbacks to riding in a ride-hailing service are almost equally apparent. Largely unregulated driving fleets means cities cannot know the impact on air quality (vis a vis tailpipe emissions). Questions about the drivers themselves also arise, as do concerns about the impact on taxi and limousine industry workers.

Several of these issues came to a head in 2016 when Uber decided to launch a fleet of 50 electric vehicles in London. Combined with the autonomous drive experiments in Pittsburgh, the impact on taxi fleets could be enormous.

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Uber Goes Electric

While Uber has said its London fleet is about 60% hybrid vehicles, the jump to all-electric cars would be significant in the battle to reduce emissions. According to the U.S. EPA, the most efficient gasoline hybrid, 2016 Toyota Prius Eco, uses 5.9 barrels of oil per year and emits 158 grams of greenhouse gases per mile.

The most efficient electric car consumes the equivalent of 0.2 barrels of oil per year and emits 0 grams of greenhouse gas per mile. When charging on renewable energy, EVs are the cleanest form of motorized transportation available. Clean-air benefits would increase with every vehicle put into operation.

Uber’s London test will begin with 30 models of the BYD e6 and 20 models of the Nissan Leaf. (China-based BYD is the largest electric automaker by sales volume.) For those who consider an electric vehicle too impractical for taxi fleets, e6’s 180 miles of range should calm those concerns. A similar program with half the number of vehicles launched in Chicago in 2015.

After three months, the data from Uber’s EV fleet in London will provide a foundation for the ride-hail company and government officials considering an expansion.

GM Releasing First Chevy Bolt EVs to Lyft Drivers

The Uber experiment in London will present a picture of the viability of long-range EVs in taxi fleets, but soon thereafter we’ll begin learning how similar cars work in North America. General Motors announced it would provide the first available Chevrolet Bolt EVs to Lyft drivers taking part in the Express Drive program.

With an EV capable of traveling 238+ miles on a single charge, Lyft drivers will be capable of covering nearly 400 miles with a 20-minute break for fast-charging. Given the average New York City cab drivers drive is 180 miles per shift, we expect the first Bolt EV trials (in Los Angeles) to go well. The BYD e6 operating in London and Chicago has that exact (180-mile) range.

As we have covered in several blog posts, the lower operating costs of electric cars becomes an even bigger factor in high-mileage fleet use. Coupled with the low prices of Lyft rentals to drivers (as low as $99 per week according to reports), formerly prohibitive upfront costs are neutralized, opening the door to widespread adoption.

While drivers test how well an EV works as a ride-share vehicle, a younger generation of car consumers gets to know how electric drivetrains work.

Autonomous EV Taxi Service

While ride-hail and taxi fleets gather data on the viability of electric cars, automakers join several other companies in testing self-driving vehicles for the same purpose. Uber’s experiment with autonomous Ford Fusion Hybrids in Pittsburgh is only a glimpse into the future where several parts of the transportation equation improve.

When operated efficiently – via right-sizing and well-mapped routes – traffic and emissions would be vastly reduced by EV taxi fleets. Growing concerns over air quality and congestion in megacities may necessitate the transition within the next decade. By then, several companies will have self-driving fleets on the road.

Ford has already announced it is producing a self-driving vehicle exclusively for ride-sharing purposes for release by 2021. For their parts, Uber and Lyft are deciding the best route to take for fast-tracking self-driving vehicles. After all, drivers (i.e. labor costs) are the biggest expense in this business model.

Effects of Autonomous Electric Fleets

As fleet owners wrap their head around the dizzying number of announcements and developments in vehicle technology, there are some clear effects to consider.

For starters, many of the obstacles to electric vehicle adoption are disappearing. While charging infrastructure was once limited, the number of fast chargers is rapidly accelerating in North America and around the world. (See our heat maps of the incredible changes since 2015.) This upgrade, along with longer-range vehicles at better prices, make EVs more viable for fleets every year.

Within 5-10 years, fleet owners could see:

• Massive drops in labor costs. Without drivers behind the wheel, fleets become far less expensive to operate.
• More efficient routes. As satellite technology improves with self-driving tech, fleets should travel the same distances in shorter time-frames.
• Even lower fueling costs. More efficient vehicles continue appearing every year, and the Toyota Prius Prime (133 MPGe) is the industry’s new benchmark. Autonomous vehicles use even less fuel. That means lower fueling costs in the future.
• Fewer battery concerns. Though concerns about EV battery degradation are overblown, the burgeoning battery boom will make replacement batteries much more affordable and widely available.
• Opportunities in government pilots. Fleet owners willing to take the plunge with electric vehicle fleets will see opportunities to take part in government pilot programs. Emissions concerns are increasing, and governments will act more aggressively to combat deteriorating air quality.

If it feels like these changes are happening too quickly to digest, you’re not alone. We’ll do our best to keep you updated on the present and future of EVs and autonomous cars.