Can Uber and Lyft Be a Climate Solution?

By Don Anair

Gov. Brown signed several pieces of legislation this year on clean energy and transportation and one of those, signed on a boat in San Francisco bay on a windy afternoon, was squarely aimed at ensuring ride-hailing companies contribute to California’s climate efforts.

The California Clean Miles Standard and Incentive Program (SB 1014 authored by Sen. Skinner) brings ride-hailing companies into the climate solutions fold by establishing decreasing climate emissions targets (yet to be determined) for companies like Uber and Lyft. This ground-breaking legislation is the first of its kind, and sets an important example for how the increasingly popular transportation option of ride-hailing can help accelerate emission reductions from transportation, rather than exacerbate them.

Why Ride-Hailing is Important for Climate Change

App-based on-demand ride services (aka ride-hailing) have been a huge boon to mobility for millions of people, providing a convenient option for getting from point A to point B. But these services also have implications for the amount of global warming emissions coming from transportation. And since transportation climate emissions in California are growing and now account for more than 40 percent of statewide emissions, getting a handle on this source of pollution is critical.

Ride-hailing may help or hinder efforts to reduce emissions for several reasons:

• Ride-hailing is growing rapidly. Trip miles by Uber and Lyft increased more than 100% in 2016 and greater than 60% in 2017 (CPUC report). As of 2017, Uber was operating in 172 cities and towns in California and Lyft in more than 92. Statewide, ride hailing is only a small percentage of overall miles traveled (California Public Utilities Commission (CPUC) estimated it at 2%) but in some places is a sizable percentage of daily trips. In San Francisco, for example, SFMTA estimates that 15% of in-town trips, and 20% of total miles traveled during the week, is in ride-hailing vehicles.

• Ride-hailing is increasing vehicle miles traveled and congestion. While ride-hailing is getting some people to leave their own cars at home, it is also leading to additional car trips that increase vehicle emissions and congestion in some cities. That’s because ride-hailed trips often displace trips that would have been completed by walking, biking, or transit, or add trips that would not have been taken at all. As noted in this white paper on the Future of Mobility by researchers from the Transportation Sustainability Research Center at UC Berkeley, “in 3 out of 4 studies, more than a third of respondents would have taken public transit, walked, or biked, in place of” ride-hailing. Furthermore, even when they displace personal car trips, ride-hail trips can end up adding more vehicle miles than the car trip they are displacing because “dead-heading” miles—miles traveled without any passengers between drop-offs and pick-ups—can account for an estimated 20% (SFMTA) to 40% (CPUC) of all ride-hailing miles. Several cities are trying to get a better handle on congestion impacts from ride-hailing services from New York to San Francisco and solutions to deal with it.

• Ride-hailing could usher in a new era of car-pooling. It’s never been easier to share a ride with someone if you live in an area where UberPOOL or LyftLine are available. In California, pooled-rides represent more than 30% of the ride requests by Uber and Lyft passengers (CPUC). Significantly increasing vehicle occupancy by pooling rides is one way to increase passenger miles without increasing vehicle miles or pollution and app-based services are providing the tools to make this work.

• Ride-hailing could accelerate the electrification of vehicle miles traveled. A typical car travels about 12,000 mile per year. But a driver for Uber or Lyft could easily drive double that or more. As an example, a report on taxis in New York City indicated a typical cab travels 70,000 miles in one year. So an EV used in a ride-hailing service has the potential to travel a whole lot more miles than a typical EV used by an individual for personal transportation. Replacing gasoline-powered ride-hailing trips with EV ride-hailing trips could slash climate emissions since powering cars with electricity instead of oil reduces emissions, even when accounting for emissions from generating the electricity.

• Ride-hailing has the potential to support greater use of mass transit or could possibly undermine it. With easily accessible ride-hailing offering an attractive first-mile and last-mile option, commuters may find some forms of mass transit more attractive. A surveycarried out by researchers at UC Davis of ride-hailing users found respondents increased their use of heavy-rail (including subways and commuter rail) and walking (see figure). But it’s not all good news. Respondents also reported a decrease in bus and light rail use and on net, the study authors report an overall decrease in transit use by current ride-hailing users. So ride-hailing could help improve mass transit, by making it more accessible, convenient and efficient than it is today, but it could also undermine transit by pulling passengers away.

Disruptive Transportation: The Adoption, Utilization, and Impacts of Ride-Hailing in the United States, October 2017 by Regina R. Clewlow and Gouri Shankar Mishra

Ultimately, ride-hailing services will make the biggest contributions to reducing climate pollution from transportation if they lead to more pooled rides, less overall VMT, more vehicle electrification, greater utilization of mass transit and more biking, walking or scooting. But that outcome is far from guaranteed without clear public policy direction. And that’s just what SB1014 is designed to provide.

The California Clean Miles Standard and Incentive Program – SB1014

• Establishes a global warming emissions baseline for ride-hailing companies by January 2020

The new law requires the California Air Resources Board to establish an emissions baseline, on a per-passenger-mile basis, for ride-hailing companies.

Here’s a basic example of how to calculate an emissions per-passenger-mile metric. First, take all the vehicle miles traveled by ride-hailing vehicles – waiting for passengers, between pick-ups and drop-offs, and during the actual trip with a passenger or passengers. Then estimate the emissions for those miles traveled based on the efficiency of the vehicles used. Finally, divide that by the number of miles each passenger actually travels in the vehicle.

The bill does add one more factor into the mix—did the trip facilitate walking, riding, or other modes of zero emission or active transport? It’s not exactly clear how this will ultimately be wrapped into the calculation. Here’s one possibility. If a passenger uses Uber Express Pool and walks a few blocks to the pickup location, that might be factored into the overall passenger miles, hence reducing the overall emissions per passenger mile figure.

• By 2021, sets annual emission reduction and zero emission vehicle targets starting in 2023 to be implemented by the Public Utilities Commission

After setting a baseline, the California Air Resource Board is tasked with establishing annual emission reduction targets to apply to companies starting in 2023. Along with setting overall emission per passenger mile targets, the bill also requires specific targets for increasing passenger miles traveled using zero-emission vehicles. The CPUC will implement the actual standard given their role in regulating ride-hailing companies.

• By January 2022, and every two years after, requires companies develop emission reduction plans.

Once targets are set, ride-hailing companies will develop plans to demonstrate how they will comply with the standards.

• Calls for state agencies to consider these goals in their vehicle electrification planning and funding decisions.

Several state agencies, including the California Energy Commission, California Public Utilities Commission and the California Air Resources Board, that make decisions about funding for vehicle incentives and charging infrastructure deployment will now consider ride-hailing electrification goals in their decision making. The bill also calls for the program to support sustainable land-use objectives, and clean mobility goals for low and moderate-income drivers, while minimizing any negative impacts.

Setting a Strong Standard Will Ensure Ride-Hailing is a Climate Friend, Rather Than Foe

This bill sets up a structure for ensuring ride-hailing delivers on its potential to help accelerate climate reductions in the transportation sector. It complements the current efforts of Uber and Lyft to promote electrification on their platforms and reduce climate emissions. It also ensures they are accountable for making steady progress while providing flexibility in how they meet the goals.

SB1014 could have required a more straightforward metric, like emissions per vehicle mile traveled or just an EV deployment requirement, but that would have only encouraged lower emitting vehicles. Instead, by using an emissions per-passenger-mile metric, the standard can encourage a broader range of positive outcomes including: use of cleaner ride-hailing vehicles, greater vehicle occupancy (i.e., pooling), more efficient operations with less deadheading, and encouraging increased use of active transportation. All of these are ultimately important in moving toward a more sustainable, and low emission transportation future.

What’s Next?

The California Air Resources Board is on tap to develop an emissions baseline with finalization by January 2020 so I’d expect a public announcement in the next few months regarding a process.

No one except for Uber and Lyft knows exactly how many miles Uber and Lyft vehicles are driving, the vehicles that are driving them, or how many passengers are in them. All of this information will be critical to developing a baseline to measure future emission reductions against. Ride-hailing companies will need to be transparent with regulators about the underlying data they are reporting on and be accountable for its accuracy.

Setting the structure and stringency levels of the program will be the next critical challenge. If both Lyft and Uber stand by their public commitments to more sustainable transportation, then the process for developing emissions targets should prove to be productive.

Don Anair, research and deputy director of the UCS Clean Vehicles Program, is a vehicle engineer and an expert on diesel pollution, advanced vehicle technologies, and alternative fuels.