Uber and Lyft have recently made commitments to achieve full electrification of their vehicle fleets in the United States by 2030. This initiative aims to address the issue of tailpipe pollution by replacing traditional internal combustion engines with electric vehicles (EVs). However, it is important to consider the broader implications of this transition.

According to a recent study conducted by researchers from the University of Michigan and Carnegie Mellon University, the overall societal benefits resulting from the switch from gasoline-powered vehicles to electric ones would be rather limited. On average, each trip would yield a modest gain of approximately 3% when factoring in various “costs on society.”

Societal costs

These societal costs include factors such as increased traffic congestion, heightened collision risks, and amplified noise levels, primarily due to ride-hailing drivers traveling to and from fast-charging stations. While the elimination of tailpipe emissions would undoubtedly contribute to a reduction in greenhouse gas emissions, the study highlights the importance of considering the broader impacts of such a transition.

It is worth noting that this study provides valuable insights into the potential trade-offs associated with the electrification of ride-hailing fleets. While the reduction in greenhouse gas emissions is undoubtedly a positive outcome, the societal costs mentioned above need to be taken into account when assessing the overall impact. Achieving a comprehensive understanding of these factors is crucial for formulating effective policies that can maximize the benefits of transitioning to electric vehicles in the ride-hailing sector.

“Our simulation showed that electric vehicles drive greater distances without a passenger than do gasoline vehicles, since EVs have to travel to chargers more often than gasoline vehicles have to refuel,” the researchers explain. “Furthermore, fast chargers are not as ubiquitous as gas stations, which means EVs have to travel farther each time they refuel than gasoline vehicles.”

Modelling the transition

Utilizing a newly developed high-resolution model known as AgentX, researchers conducted a simulation using actual Uber and Lyft trip data collected from the vibrant ride-hailing market of Chicago between 2019 and 2022. Prior to the Covid-19 outbreak, this city boasted an average of around 300,000 daily ride-hailing trips, making it an ideal representative for such analyses.

The simulation encompassed over a million Uber and Lyft trips, accounting for weekdays, weekends, and varying seasons. It considered trips both pre-pandemic and post-vaccine distribution, ensuring a comprehensive evaluation of the data. To assess the costs to society, the researchers employed standard economic tools that express these costs in monetary terms. While the study’s focus was Chicago-specific, the researchers suggest that the findings are likely applicable on a broader scale.

The investigation yielded the following key findings. Electrifying Chicago’s ride-hailing fleets would result in a substantial reduction of 40%-45% in lifetime greenhouse gas emissions compared to gasoline-powered vehicles. This reduction can be attributed to the enhanced efficiency of electric vehicles.

Health impacts

However, the study revealed that health impacts stemming from local air pollution would increase by an estimated 6%-11% per trip, on average. This increase is due to heightened concentrations of local pollutants like sulfur dioxide, nitrogen oxides, and particulate matter, which arise from power plants burning fossil fuels.

The additional driving required to reach and return from charging stations would lead to a 2%-3% increase in traffic-related societal harms, including congestion, crash risks, and noise pollution.

Overall, the complete electrification of ride-hailing services would generate a net reduction of approximately 3% in total societal harms per trip.

To put this into perspective, a 3% reduction in costs to society equates to approximately $1.5 million in annual savings for the city of Chicago. It is noteworthy that ride-hailing activities in Chicago are estimated to generate revenues of $4 million to $5 million each day, providing context for the significance of these findings.

Minimal change

“It may seem counterintuitive that overall costs to society fall so little, even though greenhouse gas emissions are substantially reduced by the switch to EVs,” the authors explain. “But on a per-mile basis, greenhouse gas emissions are a very small part of the total costs imposed on society by these vehicles. The costs are dominated by traffic externalities—congestion, crash risk and noise—which are directly correlated with vehicle distance traveled. And vehicle distance traveled will increase with electrification.”

According to the study, approximately 80% of the societal costs arise from traffic-related factors, while the remaining 20% are attributed to emissions. The assessment takes into account the comprehensive lifetime costs associated with the entire lifecycle of electric vehicles (EVs) and gasoline-powered vehicles, encompassing aspects such as their construction, operation, and disposal. These costs encompass battery manufacturing, gasoline refining, and vehicle production.

To evaluate the impact of EVs, the researchers specifically examined the size of the battery packs and how it influences vehicle-related consequences. The hypothesis was that smaller battery packs would require less energy and result in lighter vehicles, potentially leading to savings in greenhouse gas emissions.

Contrary to their expectations, the study revealed that smaller battery packs did not yield the anticipated benefits. It was found that a reduction in battery size necessitated more frequent visits to charging stations for EV drivers. Consequently, the additional miles incurred during these extra trips offset any emissions gains resulting from the utilization of smaller battery packs.

“Overall, our findings made it very clear that a large part of the damage that cars cause is unrelated to their air emissions and is therefore unlikely to be eliminated by electrification,” the authors conclude.

“Electrification is a small win for society. A bigger win would be to dramatically reduce our dependence on cars. Policies that decrease vehicle distance traveled through investments in public transit and infrastructure for biking and walking, or that reduce crash risk by improved vehicle safety, are critical.”