Lyft and Uber have pledged to electrify their Canadian fleets by 2030, but the more ride-hailing displaces transit, the more we need public policy to drive down its emissions, argues Dan Woynillowicz

Like just about everything, the ride-hailing industry has been hammered by the COVID-19 pandemic. Through the spring, the lockdown of the economy kept people at home — no commutes to work, rides to the restaurant, or need to get from an airport to a hotel. By summer, the use of ride hailing began to rebound, but for Uber — effectively the world’s largest taxi company — numbers were still down 75 per cent from a year earlier.

But the rise of ride-hailing seems unlikely to be thwarted in the long-term, and in fact may benefit from persistent public fear about riding public transit and the knock-on effect of lower transit agency revenue leading to further service reductions.

Undermining public transit

Even without a global pandemic making people think twice about taking the bus, the ride-hailing industry was affecting public transit ridership. A 2018 study in the Metro Boston area found that 42 per cent of ride-hailing service passengers surveyed indicated that absent ride-hailing they would have taken public transit. Further, some of this “transit substitution” takes place during rush hour, with 15 per cent of all ride-hailing trips occurring during the morning and afternoon commute periods.

These findings are consistent with a national U.S. study, which found that, “After using ride-hailing, the average net change in transit use is a 6% reduction among Americans in major cities.” It further found that “…49% to 61% of ride-hailing trips would have not been made at all, or by walking, biking, or transit” and concluded “ride-hailing is currently likely to contribute to growth in vehicle miles traveled (VMT) in the major cities represented in this study.”

More carbon pollution

With 50 per cent of ride-hailing kilometres traveled without passengers, a 2020 study found that ride-hailing services produced on average 69 per cent more pollution than the trips they displace. More kilometres traveled plus more people in cars (instead of buses) equals higher carbon pollution: this is ride-hailing’s dirty secret.

The big players in ride-hailing like Uber and Lyft have been proactive in making commitments to address this by shifting their fleets to electric vehicles. Earlier this summer, Lyft set 2030 as its deadline for transitioning to 100 per cent zero-emission vehicles. And this week, Uber announced a “global commitment to becoming a zero-emission mobility platform,” with a 2030 target to have fully electric cars account for 100 per cent of rides on its platform in Canadian, U.S. and European cities.

But Lyft and Uber aren’t the only ride-hailing players cruising Canadian streets, a lot of kilometres will be traveled between now and 2030, and voluntary corporate commitments are just that, voluntary. If we want to ensure that the rise of ride-hailing doesn’t bring with it a big rise in carbon pollution, we’re going to need public policy.

Look to California

As with most progressive climate policy for the transportation sector, if we want a leading example we can look to California (see also: heavy duty trucks).

Enter the Clean Miles Standard. Cognizant of the extent to which ride-hailing could perpetuate California’s battle with smog, in 2018 the state enacted legislation that will require ride-hailing companies to reduce their emissions as they transition their fleets to zero-emission vehicles. In a move designed to spur more pooling (and hence address congestion), the law focuses on emissions per passenger mile, rather than emissions per vehicle mile (an aside: COVID-19 led Uber and Lyft to suspend their pooling options).

In the run-up to this year, the California Air Resource Board (CARB) collected data to establish a 2018 baseline for carbon pollution from ride-hailing companies on a per-passenger-mile basis. This baseline will inform the development of annual pollution reduction targets — by CARB and the California Public Utilities Commission — for ride-hailing companies, commencing in 2023. There will also be targets for increasing passenger miles traveled with zero emissions. And by the start of 2022, each ride-hailing company is required to develop a greenhouse gas emission reduction plan, which will be updated every two years.

Holistic approach

Not surprisingly California is taking a holistic approach to the regulatory design: in things that will promote pooling, active transport and transit usage; in looking forward to automated vehicles, and in maximizing transportation access equity (while also minimizing the burden to low- and moderate-income drivers).

In Canada a pattern has developed. California breaks trail, and leading Canadian provinces follow. Typically, B.C. and Quebec. If we’re lucky, the federal government then follows suit (as possible given jurisdictional constraints), and we achieve some national progress. The introduction of ride-hailing in Canada has been a patchwork, but no province has yet attempted to address the implications this new transportation service has for transit, congestion and carbon pollution.

Careful design

If carefully and collaboratively designed, ride-hailing can serve as an important complement to public transit. For example, it can be an effective substitute for more limited public transit late at night or can serve as a viable alternative to providing transit service to sparsely populated, low-density areas. As researchers at UC-Davis have documented, in San Clemente and Dublin, Calif., officials canceled fixed-route buses with the lowest ridership and provided discounts for people to travel in Lyft and Uber. In Phoenix the price of ride-hailing trips to and from 500 city bus stops is discounted and Denver offers free rides to suburban light rail stations.

Whether Canadian policymakers are trying to address declining transit ridership in the face of COVID-19, congestion as people return to the office (increasingly in their own cars), or the stubborn challenge of transportation-related carbon pollution, there are examples from south of the border we can draw from.

Ride-hailing has much to offer, but only if we shape its role to solve problems without creating new ones.

Dan Woynillowicz is the principal of Polaris Strategy + Insight, a strategic advisory firm helping accelerate the energy transition and deliver climate solutions.