Lyft Plans to Ditch Fossil Fuels by 2030

Ride Hailing Surge

In recent years, the surge in ride hailing through companies like Uber and Lyft has started to have an impact on transportation systems and energy consumption in many of the world’s large urban areas. While Uber and Lyft have promoted their transportation and technology platforms as a potential solution to increasing levels of traffic congestion and rising carbon emissions, studies suggest that these mobility services may actually be increasing traffic congestion and promoting more fossil fuel consumption. Rather than spurring the development of a ride-sharing utopia that eases urban congestion, reduces the cost travel, and lowers air pollution, Uber and Lyft have made it easier for people to use mobile apps to hail individual cars, which is undermining public transportation systems around the world. With less people using public transportation in urban areas, congestion has increased, oil consumption from the transportation system has been rising, and greenhouse gas emissions have been surging. However, after being criticized by city planners and transportation officials, Lyft has vowed to clean up its mobility services through the elimination of fossil fuels by 2030.

Transportation Impacts

Researchers from the Institute of Transportation at the University of California, Davis say that the rise of the ride-sharing apps has had an adverse impact on energy-efficient public transportation systems. After the researchers evaluated seven large American cities, they concluded that ride-hailing services reduced public transit use by an average of about six percent in each of the cities (Hao, 2017). City planners have long theorized that the rise of ride-hailing services and other on-demand transportation options would have a negative impact on carbon emissions and transportation congestion. Amid the rising scrutiny over ride hailing, the U.S. Energy Information Administration recently highlighted that the transportation sector has overtaken the electric power sector in terms of being the largest overall contributor to greenhouse gas emissions in the United States. The transportation sector now emits about 1.9 billion tons of CO2 each year, while the electric power sector produces about 1.8 billion tons of CO2 annually (Hockenos, 2017).

As transportation emissions and fossil fuel consumption have continued to rise over the past decade, Lyft has started to take action to reduce emissions and oil consumption. In 2018, Lyft made a move to enhance the company’s environmental image by vowing to invest in projects to offset the carbon emissions from its ride-sharing services. In an effort to cast itself as an environmentally conscious alternative to Uber, Lyft started to invest millions of dollars annually to reduce greenhouse gas emissions and support better air quality around the world. By the end of 2018, the company said its environment efforts have helped to offset over one million metric tons of greenhouse gas emissions (Rathi, 2018). Uber has yet to make a similar commitment to reduce carbon emissions.

Commitment to Sustainability

For every ton of carbon that is emitted by a Lyft vehicle, the company will pay a San Francisco-based sustainability company to invest in strategies to remove the carbon from the atmosphere. The company known as 3Degrees has been using funding from Lyft to plant trees, invest in renewable energy projects, and enhance the efficiency of other systems and programs. While this process of carbon offsetting was once a popular system for environmental advocates, it has become a less sought-after initiative in recent years. Some researchers have even questioned whether initiatives to offset carbon emissions even have a measurable impact on reducing climate change. Because of the controversy around carbon offsetting programs, Lyft chose to invest with 3Degrees since the company has been officially certified as a carbon offsetting organization by three separate environmental organizations.

The cofounder and president of Lyft, John Zimmer, has long been committed to moving towards a model of sustainability. Zimmer has often spoken publicly about the need to enhance his company’s overall environmental responsibility. In a 2018 interview, Zimmer described how, “We get up every day thinking about how we can continue to have a positive impact on the communities we serve. As we grow, so does the opportunity to increase this impact. Making all rides carbon-neutral is one more step toward our mission of improving people’s lives with the world’s best transportation” (Meyer, 2018). Even though Uber and Lyft have both vowed to reduce private car ownership and thereby reduce vehicle emissions, only Lyft has continued to move forward with enhanced plans to bolster its environmental image.

Future Mobility Plans

John Zimmer says that the average American car is used just four percent of the time (Bliss, 2018). The other 96 percent of the time, vehicles owned by Americans sit idle in garages or parking lots. If ride-hailing services are able to vastly expand their reach, Zimmer says that his company has the opportunity to reduce the overall number of vehicles on the road. Uber also shares a similar vision for reducing the number of personal vehicle trips. Andrew Salzberg, Uber’s lead policy and researcher manager, says that the future of urban mobility “is about scaling up alternatives that reduce personal vehicle use in cities” (Bliss, 2018). However, one important aspect that can’t be overlooked is the fact the emissions are still emitted no matter who owns the vehicle, whether it be a personal car or one within a fleet of ride-hailing vehicles. It’s all about the number of miles driven and the number of people per vehicle.

It’s clear that the rapid development of ride-hailing technologies has had an impact on energy and transportation. While Lyft made an attempt in 2018 to offset its pollution through investments made with 3Degrees, these investments don’t change the overall fundamentals of the ride-hailing industry. Environmental professionals say that the main challenge is the fact that Uber and Lyft are contributing to more miles driven, more trips being taken, and increasing levels of greenhouse gas emissions. Therefore, even with Lyft’s partnership with 3Degrees, more trips with Lyft often equate to less trips being take on public transit, which will continue to operate regardless of the overall capacity. Moreover, researchers from the University of California, Berkeley and the Natural Resources Defense Council say the rise of Uber and Lyft is also reducing the number of trips that would have otherwise been taken through active modes of transportation like walking and biking.

An Electric Commitment

In an effort to take the company’s environmental image to the next level, John Zimmer recently announced that Lyft would be cutting all fossil fuels from its fleet by 2030. In a press conference, Zimmer exclaimed that, “Now more than ever, we need to work together to create cleaner, healthier, and more equitable communities” (Hawkins, 2020). In response to this ambitious commitment, policy makers, environmentalists, and a wide array of academics have praised the company for boldly leading the way towards a more sustainable transportation system. Fran Pavely, who is the environmental policy director for the University of Southern California Schwarzenegger Institute, says that Lyft’s commitment to achieving 100 percent zero-emissions vehicles shows that private companies can be leaders when it comes to fighting climate change. Member of the Intergovernmental Panel on Climate Change, Daniel Kammen, says that’s Lyft’s actions show an enormous amount of leadership on climate protection and social justice.

Fossil Fuel Industry Concerns

While Lyft’s commitment to eliminate fossil fuels from its fleet of vehicles has received a tremendous amount of praise from environmentalists and natural resource professionals, stakeholders within the fossil fuel industry continue to express concerns about the impact of electric vehicles on oil consumption. Since the transportation sector is the biggest driver of global oil consumption, a total shift towards electric vehicles would have a catastrophic impact on fossil fuel industry profits. As a result of this threat against the oil and gas industry, the Koch Brothers and Exxon Mobil have started to ramp up their advertising campaigns against the electric vehicle movement. Economic analysts from Bank of America Merrill Lynch released a series of reports in 2018 that outlined how the demand for oil could start to drop significantly between 2021 and 2023 if the adoption of electric vehicles continues to accelerate (Domm, 2018). The uncertain outlook about the future of gas-powered vehicles may be viewed as a net benefit for environmentalists but could have a wide range of impacts on the global economy.

As Lyft has made a major commitment towards electric vehicles, Uber may be forced to make a similar commitment if cities move forward with plans to mandate that ride-hailing companies switch over to cleaner modes of transportation. According to the Union of Concerned Scientists, the typical ride-hailing trip emits nearly 50 percent more carbon emissions that the typical personal vehicle trip (Hawkins, 2020). This significant increase in emissions can be attributed to the fact that Uber and Lyft drivers spend a great deal of time traveling to destinations to pick up people without any passengers in their vehicles. These have become known as deadhead trips. In San Francisco alone, data suggests that over 20 percent of the vehicle miles traveled by ride-hailing companies are conducted without any passengers (Bliss, 2018). These alarming figures have started to catch the attention of local policy makers in many of the country’s largest cities.

How Will Lyft Make the Transition?

Between 2013 and 2018, about 300 million miles have been travelled by Uber and Lyft vehicles without any passengers (Bliss, 2018). In addition to putting an extra strain on New York City’s already congested streets, this has amounted to an enormous increase in greenhouse gas emissions. In an effort to reduce fossil fuel emissions from Uber and Lyft vehicles, some cities are looking to require that a certain percent of ride-hailing trips be conducted using electric vehicles. While Lyft may have a leg up on Uber if more cities start to mandate these electric vehicle requirements within their ride-hailing services, the transition to 100 percent electric by 2030 may be a monumental challenge for Lyft to overcome. While the company has already started to transition its own fleet of Express Drive program vehicles over to electric vehicles, it will be much more of a challenge to convince individual vehicle owners to abandon their gas-powered cars.

Some fossil fuel industry executives have deemed Lyft’s 2030 electric vision as unrealistic. In less than a decade, Lyft will have to transition its drivers over to electric vehicles at a rate that is anticipated to be much more aggressive than the general public’s expected transition to electric vehicles. For example, economic analysts from the McKinsey & Company consulting firm say that only about 20 percent of global vehicle sales are likely to be electric vehicles by 2030 (Hensley et al, 2018). In response to the notion that Lyft is being too ambitious, the company says that it will negotiate with the federal government and auto manufactures to secure group discounts for electric vehicle purchases made by Lyft drivers. Through future lobbying efforts, Lyft hopes to turn its electric vision into a reality.

Sources

Anair, D. (2020). “Electrifying Ride-hailing: Part 1 – Six Reasons Why Uber and Lyft Must Go Electric.” The Union of Concerned Scientists.

Bliss, L. (2018). “Uber and Lyft Could Do a Lot More for the Planet.” Bloomberg.

Domm, P. (2018). “Electric vehicles: The little industry that could take a bite out of oil demand.” CNBC.

Hao, K. (2017). “No, Lyft and Uber probably won’t solve urban road congestion.” Quartz.

Hawkins, A. (2020). “Lyft vows ‘100 percent’ of its vehicles will be electric by 2030.” The Verge.

Hensley, et al. (2018). “Three Surprising Resource Implications from the Rise of Electric Vehicles.” McKinsey Quarterly: 00475394, 2018, Issue 2

Hockenos, P. (2017). “Transportation Replaces Power in U.S. as Top Source of CO2 Emissions.” Yale school of Forestry and Environmental Studies.

Meyer, R. (2018). “Your Lyft Ride Is Now Carbon-Neutral. Your Uber Isn’t.” The Atlantic.

Rathi, A. (2018). “This is one way Lyft is definitely better than Uber.” Quartz.

Rathi, A. (2020). “Lyft says all rides will be in electric cars by the end of 2030.” Fortune.