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Lyft cuts carbon offsets, promises to transition to electric vehicles by 2030

Lyft is making a pledge to offer rides only in electric vehicles by 2030, while it also canceled a program to help fight climate change by offsetting carbon...

Posted: Jun 18, 2020 3:23 AM

Lyft is making a pledge to offer rides only in electric vehicles by 2030, while it also canceled a program to help fight climate change by offsetting carbon emissions.

The company is scrapping the carbon offset program it launched in 2018. The offsets made all of its rides carbon neutral, but at a cost of millions of dollars. Lyft said that net emissions from cars on its platform may increase in the short term as a result.

Lyft said it's motivated by the climate crisis to switch to an all-electric fleet. If the ridehailing service delivers on its pledge to offer rides solely in electric vehicles, there will be long-term environmental benefits -- as well as problems for its drivers, who overwhelmingly own gasoline cars.

Transportation is the largest source of emissions in the United States. Research has shown that ridehailing trips, from companies like Lyft and Uber, have more emissions than a trip in a personally owned vehicle, as drivers must first drive to the passenger, and then drop the passenger at their destination. The switch to electric vehicles is hoped to improve air quality in cities where Lyft operates.

"It's on us to lead," Lyft co-founder John Zimmer told reporters. "We feel that responsibility in the midst of the pandemic, thinking of ways we can bounce back stronger."

But Takele Gobena, a former ridehail driver who is a union representative at Teamsters Local 117, which represents ridehail drivers in Seattle, expects any switch to electric vehicles will devastate drivers due to the costs of swapping vehicles.

"Drivers are already having difficulty bringing food to the table," Gobena told CNN Business. "I don't know how drivers are going to survive with this new policy."

Electric cars are cheaper to operate than gas vehicles, but have much higher up-front costs today. A comparable gas-powered car can cost 50% less. In 2019, electric vehicles accounted for only 2.5% of the total light vehicle market worldwide.

Lyft expects that by the middle of the decade, electric vehicles will be more economical for ridehail drivers than gasoline cars.

Most relatively inexpensive electric cars today still cost nearly $40,000, such as the Chevrolet Bolt, the Hyundai Kona EV and the Kia Niro EV. Some of next year's electric car models cost even more. The Tesla Model Y sells for a mimimum of $52,990, according to the company's website, while the 2021 Ford Mustang Mach-E starts at $43,895.

Experts caution that Lyft's timeline is ambitious.

"The industry is going electric but at a much slower rate than was expected a few years ago," said Jessica Caldwell, an analyst at Edmunds. "While most automakers are dedicated to moving [to] electric, the global pandemic has tempered that shift for change."

Caldwell added that if President Trump is re-elected this fall, it's unlikely that there will be more government incentives for electric vehicles.

Ultimately, drivers must pay for and use their own vehicles. But Lyft risks losing its ability to recruit and retain drivers if drivers feel they can make more money on competing services that allow gasoline vehicles.

Lyft said it will negotiate with automakers to get drivers group discounts. It also plans to work with policy makers and other partners to lower costs of EVs. Efforts may include pushing for EV tax credits, or expanding charging infrastructure.

Lyft already rents several hundred electric vehicles to drivers in a handful of cities. Lyft said that by 2028, all of the vehicles it rents will be electric.

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