DECARBONISING RIDE-HAILING
DECARBONISING RIDE-HAILING
Move EU brings together the leading actors in the field of new mobility services. Speaking with one voice, our members aim to foster sustainable deployment of on-demand mobility and ride-hailing in the European Union. Move EU members connect passengers with licenced taxi and private hire vehicle (PHV) drivers, for the purpose of carrying passengers in return for payment.
As ride-hailing platforms, Move EU welcomes the EU’s increased climate ambitions for 2030 and the 2050 carbon neutrality goal. As the transport sector is set to reduce its 2050 emissions by 90% compared to 1990 levels, Move EU members are committed to contributing to this reduction in the urban context by electrifying their fleets and user networks, while offering alternative solutions to private car ownership.
By 2040 at the latest, all rides offered by Move EU members will be carbon neutral. Ride-hailing platforms have a critical role to play in cutting harmful transport emissions, a sector that represents almost a quarter of Europe’s total greenhouse gas emissions. The potential emissions savings by drivers active on ride-hailing platforms are three to four times greater compared to average car owners, due to the higher mileage they account for. Given this disproportionately large positive impact on climate, Move EU members support high-mileage commercial drivers to be at the forefront of the transition to electric vehicles. Our member companies are raising the sustainability bar, and want to play a big part in driving towards a resilient mobility ecosystem. To do so, we are seeking to partner wherever possible with charging companies, carmakers, governments, cities and other stakeholders to create the economic and policy conditions that make electrification work for European drivers. To accelerate decarbonisation, drivers must be able to buy affordable electric vehicles while relying on an appropriately located and well-functioning urban charging infrastructure. This will allow them to avoid a competitive disadvantage from switching to low emission vehicles from fossil fuel cars which as of today make better economic sense for them in most European cities, especially because they do not lose earnings while charging. We are therefore calling on EU policymakers to:
- Ensure widespread pan-European rapid deployment of urban charging infrastructure throughout the EU with an ambitious revision of the Alternative Fuels Infrastructure Directive and the introduction of a European Right to Plug initiative for taxis and PHV drivers in the context of the AFID revision.
- Address the lack of affordable/second-hand battery electric vehicles (BEVs), by introducing - strict emission targets within the revision of the CO2 emission performance standards and by offering incentives. Coupled with specific electrification targets for corporate fleets would boost the second-hand EV market which many taxi and PHV drivers rely on.
- Tilt vehicle use economics to narrow the total cost of ownership (TCO) gap for drivers between internal combustion engine vehicles (ICEs), and BEVs, taking into account the BEV usage instead of ownership. To address the current TCO gap, the EU should introduce a financing fund to incentivise fleet renewal of the ride-hailing sector and explore the benefits of renewal schemes at EU level. It should also allocate parts of the national recovery funds to the deployment of charging infrastructure or to offer subsidies to encourage the uptake of BEV sales taking the yearly mileage of drivers into account. These measures would be effective tools to support digital technologies that enable the green transition.
In the following, a more detailed overview of the suggested actions is provided.
1. Lack of urban charging infrastructure
Charging infrastructure until today is not rolled out consistently across Europe, with 75% located in the Netherlands, France, Germany and the UK. Moreover, the charging installation planning, supportive policies and funding have been primarily designed to support private car ownership, not high-intense car use by commercial drivers or passenger services. The lack of well-deployed recharging infrastructure remains a primary barrier for EU drivers to adopt BEVs. Existing EU legislation is not ambitious enough, outdated, and not in line with the EU green ambitions. Ensuring sufficient support for high-kilometre drivers to make a fair transition to BEVs will trigger a ‘virtuous circle’: A switch to high kilometre BEVs (namely taxis, PHVs, ride-hailing and ride-sharing) could spearhead mass adoption throughout Europe, expand access and exposure to electric mobility for millions of riders, increase vehicle utilization and improve the return of investment for well-located charging infrastructure. To make this possible, BEV charging infrastructure must keep pace with BEV uptake.
Not being able to charge reliably and cheaply at home is a significant barrier for these drivers, and may even hamper the switch from their current ICE to a BEV. The ‘right to charge/right to plug’ - a right to request installation for all EV owners that cannot charge privately, as implemented in cities such as Amsterdam - would allow for demand-driven charging and guarantee charging facilities, ensuring that low-income areas are not left behind.
The upcoming revision of the Alternative Fuels Infrastructure Directive should tackle the fragmented charging infrastructure and go beyond the aim of reaching one million charging points by 2025 and three million by 2030. Mandatory targets for Member States could contribute to ensuring the consistent rollout of charging infrastructure throughout the EU, increasing the drivers’ confidence.
As taxi and PHV drivers in urban areas often lack the possibility of a private charging station, guaranteed access to charging infrastructure for high mileage drivers is recommended through a European Right to Plug.
Moreover, the Energy Performance of Buildings Directive should encourage and increase the requirements for charging stations in buildings, such as by ensuring that all parking spaces in buildings should have access to a charging point by 2035.
2. Limited second-hand market
The CO2 emission performance standards introduced in 2019 lead to a significant uptake of BEV sales in Europe in 2020. However, the share of EV sales overall is still not consistent throughout Europe. Other than the barrier of charging infrastructure, major constraints for taxi and PHV drivers intending to switch to a BEV include a limited range of models and price levels, and a very limited second-hand market for BEVs. Vehicles that are part of corporate or urban fleets tend to be replaced quicker. A wider supply of affordable vehicles for these drivers would both encourage larger BEV volumes as well as a rapid flow into the secondary market, addressing major barriers for ride-hailing drivers.
The revision of the CO2 emission performance standards should introduce stricter targets to further accelerate the uptake and availability of EV models throughout Europe.
The proposal for the Euro 7 standard should further ensure that all air pollutants will be reduced significantly to maximise the societal benefits and improve air quality.
These measures will boost the transition towards zero-emission vehicles and will therefore also create a bigger second-hand market, on which many taxi and PHV drivers rely.
Specific electrification targets for corporate fleets could additionally accelerate BEV uptake and could complement actions taken by Move EU members who do not own vehicles themselves.
3. Financing fund
Taxi and PHV drivers using traditionally fuelled vehicles experience little downtime when refuelling their cars because they benefit from a ubiquitous network of refuelling stations and get back on the road to offer mobility services within minutes. By comparison, commercial BEV drivers face substantial downtimes to recharge including search time to identify scarce charging stations, longer commute distances and times between mobility services areas and available charging, and significant plug-in time when reaching an available plug, which disincentives the switch to cleaner vehicles and is a competitive disadvantage compared to conventional providers.
In most EU cities, taxi and PHV drivers lose earnings from driving a BEV compared to ICE vehicles, especially due to charging times. Financial incentives are needed to close this interim cost gap before the vehicle and charging technologies catch up and the right set of regulatory sticks and carrots can be made available. A widespread shift to BEVs and total-phase out of ICEs will not occur until the TCO gap narrows for drivers between ICE vehicles and BEVs.
Move EU members already offer individually managed direct subsidies and scrappage schemes to support the transition to EVs and PHEVs, contributing to reducing emissions.
A fund on European or national level to support taxi and PHV drivers can compensate or balance the potential disadvantage incurred by BEV recharging times.
National recovery funds should foster the deployment of charging infrastructure and/or offer subsidies to encourage the uptake of BEV sales taking the yearly mileage of drivers into account. These measures would be effective tools to support digital technologies that enable the green transition.
4. Fleet renewal schemes
Renewal schemes such as purchase incentives have been introduced in many Member States to electrify vehicle fleets and have proved an important factor in increasing the share of EV sales. In its Smart and Sustainable Mobility Strategy, the European Commission also set the aim of exploring the benefits of renewal schemes at EU level. In addition, significant differences exist with regards to the availability of funds in different countries. So far, taxi and PHV drivers that inherently account for higher annual mileages, have not been given specific attention in awarding purchase premiums.
An EU wide fleet renewal scheme would ensure consistent uptake of BEVs and improve air quality across the Union.
When awarding incentives, specific attention should be given (e.g. preference, higher bonuses) to the usage of the vehicle, as taxi and PHV drivers offer a significant potential to reduce emissions due to their high annual mileage, instead of relying on a ‘first come first serve basis’.
Move EU is open to discussing possible ways and best practices at EU, Member State and regional level to accelerate the decarbonisation of mobility services offered via the ride-hailing sector.