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How electrifying Uber and Lyft fleets could pave the way for broader EV charging networks

A report from RMI shows potential for a new California rule to speed up fast-charging investments, reduce pollution and expand equitable EV access.
By Jeff St. John

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California has a mandate for Uber, Lyft and other transportation network companies to convert to nearly all electric cars by 2030. This could be a major opportunity to solve the chicken-and-egg problem of vehicle electrification: building enough fast-charging stations to support an EV fleet that hasn’t arrived yet and which might never appear without the charging infrastructure to support it.

A new report from think tank RMI indicates that if Uber and Lyft engaged in a coordinated effort with EV charging providers, together they could deploy a fast-charging network that not only meets the state’s 2030 electrification mandate but also creates a more accessible charging ecosystem for all drivers.

What we’re proposing here is a new modality…to leverage the very significant demand that could come from Uber or Lyft,” said Edward J. Klock-McCook, a principal with the RMI Carbon-Free Mobility team and report co-author, in an interview. (RMI is a financial backer of Canary Media.)

That demand, if it can be leveraged within a contractual arrangement that guarantees it, [could] unlock the significant amount of capital that can get this done in a way that isn’t just a car here, a charger there,” he said.

RMI’s EV Charging for All report maps where transportation network company (TNC) drivers travel and fuel up in Los Angeles, using data from General Motors’ now-defunct Maven Gig vehicle leasing service from 2018 and 2019. Maven Gig leased about 1,000 EVs and about 2,000 internal-combustion vehicles to Uber and Lyft drivers in LA over that period. Not surprisingly, EVs leased under the program were driven mainly in wealthier areas, where the economics of EV early adoption have led to the vast majority of direct-current fast chargers being installed.

By contrast, lower-income areas — where just under half of all TNC rides begin or end, according to data from Lyft — were more heavily served by gasoline-fueled cars, as shown in the maps below.

(DCFC stands for DC fast chargers. Graphic by RMI.)
(DCFC stands for DC fast chargers. Graphic by RMI.)

To date, electrification of passenger cars has developed organically, and because of the high cost in the early days, the system out there today has largely benefited more wealthy individuals and neighborhoods,” Klock-McCook said.

The California Air Resources Board last month officially approved the Clean Miles Standard, which requires TNCs to achieve fleets with 90 percent EVs and zero carbon emissions by 2030. The mandate offers a pathway to break out of that paradigm and enable broader access across the community,” according to Klock-McCook.

Deploying sufficient charging infrastructure to support the new mandate will certainly be a challenge. The California Energy Commission estimates that TNC driving accounted for 1.5 percent of light-duty vehicle miles traveled in the state as of 2018. But converting those miles to all-electric will require from 100 to 250 megawatts of public charging capacity in the LA region, which amounts to three to six times the 38 megawatts now available, according to RMI’s analysis.

That total will depend on how many TNC drivers can be equipped with lower-capacity Level 2 chargers for at-home charging, Klock-McCook said. Uber and Lyft have been partnering with state agencies to provide Level 2 home charging stations. But according to data from the International Council on Clean Transportation, only 44 percent of TNC drivers have access to charging locations suitable for Level 2 charging, largely due to constraints on installing charging systems at lower-income homes and multifamily housing.

TNCs have also worked with EV charging providers to obtain public charging discounts for their drivers. But again, those chargers are concentrated in wealthier areas, which leaves drivers unable to rely on being able to recharge in the lower-income neighborhoods where many of them work and live.

California has directed more than $2 billion toward EV incentives and EV charging infrastructure deployment, with about half of that directed at low-income and disadvantaged communities. But Dave Mullaney, RMI principal and report co-author, pointed out that the success of public charging networks all depends on companies like EVgo or Electrify America or ChargePoint…[putting] money down and investing in these neighborhoods.”

They’ll only do that if they are convinced the demand is there,” he said — and TNC drivers could provide that critical demand.

Modeling the optimal Uber and Lyft charging network

RMI’s report models an optimal deployment of direct-current fast chargers across the LA region, one that balances cost-effective charging for TNC drivers with return on investment for charging providers. The results indicate that a TNC fleet that’s 90 percent EVs could provide a utilization rate of 36 percent on a network of the size needed to provide reliable and accessible recharging across the region — enough to justify the cost of installing them in the first place.

That demand wouldn’t materialize right away, however. It will take time for TNCs to ramp up to supplying drivers with EVs to meet the state’s mandate. In the early days of that effort, chargers won’t have as many drivers to buy electricity from them, threatening their revenue.

That uncertainty creates risk for the EV charging networks, Mullaney pointed out. But if TNC companies would commit to buy a certain amount of electricity from those charging stations as they’re deployed, that could reduce the risk for charging providers that are looking for a predictable revenue stream to justify the upfront costs.

Demand and utilization only matter if you can somehow [guarantee that] that means money today,” he said. The Clean Miles Standard provides the policy to underpin expectations of future demand growth, but a guarantee from TNCs to buy a certain amount of energy from those stations — a sort of power purchase agreement for EV charging — could provide the charging companies with more certainty to get financing for a buildout.

The question becomes [whether] the portfolio matches what I need,” Mullaney said. If the actual infrastructure built is in line with the demand, that’s a financeable project.”

Analysis like the one that RMI compiled from GM’s Maven Gig data could provide a lot more certainty to companies and public entities looking to optimize their mix of private and public EV charging infrastructure dollars, Klock-McCook said. For example, the report forecasts that the cost of chargers needed to electrify TNCs in the LA area by 2030 could range from $116 million to $234 million. But it also finds that an optimally designed network could earn from $53 million to $116 million per year at its projected utilization rate.

That, in turn, can underpin this network until that private passenger market evolves to the point where it provides that private revenue that’s needed,” he said.

Designing a charging network to meet broader electrification and equity needs

That’s the second step in this process: using the network developed for TNC drivers to support EVs for the general public. Public agencies and communities working to expand access to EVs have little reason to offer public support to a charging network that will only serve Uber and Lyft’s interests, after all.

If you put a charger in a historically lower-income community, that doesn’t necessarily benefit those communities if they can’t access EVs,” said Zach Franklin, chief strategy officer at Grid Alternatives. The nationwide nonprofit solar installer manages charging programs associated with the state’s Clean Vehicle Assistance Program, which offers assistance to low-income Californians to purchase EVs, including a partnership with EVgo to offer eligible participants $1,000 in public charging subsidies.

But bringing at-home Level 2 charging to low-income and multifamily housing may be more effective ways to expand this access, Franklin said. In fact, new direct-current fast chargers in neighborhoods where most people can’t afford EVs or gain access to home charging could be seen as a precursor to gentrification, he said, particularly in a state already struggling with some of the highest housing costs in the country.

The big question is whether or not the people in those communities are part of the conversation,” Franklin said. That is the big challenge for all of us: to not think about this in the abstract but to actually engage folks in the communities we’re talking about.”

Klock-McCook agreed that expanding fast charging in lower-income areas is only one part of a much larger effort to expand EV access to as many people as possible. At the same time, RMI’s modeling of a TNC-boosted fast-charger deployment indicates that it could lead to a significant shift of charging capacity from higher-income communities today to lower-income communities in the next decade, as this chart indicates.

(DCFC stands for DC fast chargers. Graphic by RMI.)

That sets the stage for those communities to benefit, completely outside the TNC sphere,” Klock-McCook said.

RMI’s report is only a first step in building the kind of collaboration that will be required to make its vision into reality, he stressed. One looming issue is how charging networks developed on contracts with TNCs can ensure that both TNC drivers and the general public can share access to the chargers in order to avoid conflicts between everyday drivers and the Uber and Lyft drivers for whom waiting for a charge to finish equates to lost revenue.

On the broader EV charging front, problematic permitting bottlenecks will have to be smoothed out to allow for the vast expansion of charging capacity envisioned. Utilities will need to coordinate with city and county building departments to speed grid interconnections, and demand charges — utility rate structures that impose heavy costs on fast chargers with low utilization rates — will have to be mitigated to avoid strangling early-stage deployments.

What’s more, the U.S. needs to get an estimated 70 million EVs on the road by 2030 to make a significant dent in carbon emissions. We cannot do it if EVs are limited to those of significant means,” Klock-McCook said.

RMI’s report can inform policy and investment decisions beyond LA, he said. The structural issues that created the situation we evaluated in Los Angeles are similar to other cities in the U.S.”

(Article image courtesy of Charlotte Stowe) 

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.