Transitioning Ridehailing Fleets to Zero Emission: Economic Insights for Electric Vehicle Acquisition

Under California’s Clean Miles Standard (or SB 1014), transportation network companies (TNCs) must transition to zero-emission vehicles by 2030. One significant hurdle for TNC drivers is the electric vehicle (EV) acquisition and operating costs versus an internal combustion engine (ICE) vehicle. This study therefore evaluates net TNC driving earnings through EV acquisition pathways—financing, leasing, and renting—along with EV-favoring policy options. Key metrics assessed include (1) total TNC income when considering service fees, fuel costs, monthly vehicle payments, etc., and (2) the time EVs take to reach parity with their ICE counterparts. Monthly comparisons illustrate the earning differentials between new/used EVs and gas-powered vehicles. Our analyses employing TNC data from 2019 to 2020 suggest that EV leasing is optimal for short-term low-mileage drivers; EV financing is more feasible for those planning to drive for TNCs for over two years; EV rentals are only optimal for higher mileages, and they are not an economical pathway for longer-term driving. Sensitivity analyses further indicate that EV charging price discounts are effective in shortening the time for EVs to reach cost parity over ICEs. Drivers may experience a total asset gain when reselling their TNC vehicle after two to three years.