Uber’s CEO Explains How the Ride-Hailing Pioneer Is Electrifying
(Bloomberg) -- In September 2020, Uber pledged to eliminate all emissions from every trip booked on its platform globally by 2040. The ambitious announcement — made six months into the pandemic, at a time when travel was still severely disrupted — included a commitment to invest $800 million by 2025 in helping drivers switch to electric vehicles. The ride-hailing company said at the time it expected all trips in the U.S., Canada and Europe to take place in EVs by the end of this decade.
Uber initially made slow progress toward these goals, especially in its home market. A year ago, the share of battery-powered vehicles in U.S. ride-hailing was still lower than in the country’s overall passenger-car market. For its fleet to be entirely electric by the end of the decade, Uber will have to go from lagging behind in EV adoption to considerably outpacing it.
Here in Europe, the company has made some headway, my colleague Craig Trudell writes in Bloomberg Businessweek. By working with local officials, sealing deals with automakers and creating a fund to help make EVs more affordable, the tech firm is not only managing to get drivers to make the switch. It’s also repairing relations with cities it’s had tumultuous times operating in over the years.
Uber says more than 90% of new vehicles joining the platform in London are now fully electric, and about 5,000 drivers there are piloting EVs, a number it expects to double by year-end. Paris was one of the first cities where the company introduced Uber Green, enabling riders to book a trip only in a hybrid or EV. Although early uptake was slow, today 45% of the vehicles on the platform in the French capital are hybrid or fully electric, up from 15% two years ago.
Craig and reporter Jackie Davalos spoke with Uber CEO Dara Khosrowshahi about his push to transform the company into an emissions-free mobility platform. Here’s an excerpt of the interview, edited for length and clarity.
How hands-on have you been in pushing the company to make this shift?
You have to plant flags. If you have a great team, they will run toward those flags.
What I’m seeing now is the company rallying around climate, around zero emissions being a hugely important goal for the betterment of the world, but also a core business goal for Uber. It’s a race to zero, and we want to get to zero faster than any other global mobility platform.
How difficult has the push been, especially in the early stages?
Creating momentum around these initiatives that at first are small within a large organization — it’s just tough to do.
What’s helping us is that while this is a company goal, everybody feels the effects of climate change on a daily basis, the change of weather patterns.
It’s become a mission-oriented goal, not just because it’s important for the company, not just because it’s important for the world, but because it’s something that everyone personally can feel a stake in.
Are you personally engaging with automakers about securing EVs for your drivers?
I do engage with multiple automakers at top levels to encourage the transition and let them know that there’s a very, very big market in terms of affordable EVs in the form of Uber.
The higher-end vehicles are the early winners in terms of electric commercialization, but those vehicle types tend not to work economically for our platform.
What I’m really focused on with the manufacturers is going EV, building out models at the kind of scale that we need — but also models that the average American or average Brit can afford.
Are we going to see a car manufacturer that makes a dedicated vehicle for Uber drivers?
I don’t think Uber is going to get into the car manufacturing game anytime soon. We have enough challenges in our own businesses. But we have had discussions with auto manufacturers about purpose-built electric vehicles designed for ride-share. We think it’ll be a great product and we think it would be a delightful experience for drivers and riders.
We are having discussions with some of the bigger players. Obviously, these decisions take a long time and they require huge amounts of capital, but we’d love for it to continue to happen at scale.
How is Uber’s partnership with Hertz and Tesla going?
Drivers are delighted by the Teslas. They earn more, partially because of the incentives that we have in the system, but also because they get tipped at higher rates, which I guess shouldn’t be surprising because I think the Tesla experience is delightful both for the driver, but also for the rider as well.
And that allows them to get past some of the fear factor: What are my economics going to look like? How many times am I going to have to charge during the day? The range anxiety that you associate with going electric, it’s even more so for a driver making a living with the car. To some extent, getting that kind of exposure then allows a product to sell itself.
Are you thinking about applying this effort also to the UberEats vertical?
We’re prioritizing ride-share at this point because it’s got the most miles and has the largest emissions envelope, so we’re going after the larger challenges and the larger rewards first.
But we’re absolutely going to take a lot of our learnings from ride-share and apply them to delivery. Already, significant portions of our deliveries have been on two-wheelers, scooters, e-bikes, so that transformation is naturally happening.
Has this effort altered the dynamic in some cities where Uber has had a rocky history?
It’s had a very positive impact. London is definitely one of them. When you share a common goal, a lot of other things fall into place. We very much support Mayor Sadiq Khan’s vision, and ultimately, for a vision to be realized, you’ve got to do the work on the ground. The early results are promising, but there’s a ton more work to do.
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