Uber Sets Goal to Reach Net-Zero Emissions by 2040

Uber released on Tuesday a slate of targets that it said would slash its carbon footprint. It committed to spending $800 million by 2025 to help drivers switch to battery-powered electric vehicles (EVs). By 2030, the company expects all rides in the U.S., Canada and Europe will take place in EVs, a promise that will be extended around the world by 2040.  It also pledged that all electricity used to power those rides would be carbon-free by that year.

The ambitious goals come as the unprofitable company dials back once-grand growth plans. Travel restrictions related to the Covid-19 pandemic have decimated Uber’s rides business, prompting mass layoffs, permanent office closures and a re-evaluation of electric bikes, job matching and other future bets. Even once the pandemic passes, Uber and other gig economy companies face a fight over their business model, which relies on drivers working as independent contractors. California is its first battleground with residents set to vote in November on a ballot measure to reverse a 2020 law making drivers employees, with similar battles brewing in New York and Massachusetts.

Lyft Corp., Uber’s rival in the U.S. and Canada, has already committed to have all its rides be in EVs by the end of 2030. “While we’re not the first to set ambitious goals in transitioning to EVs, we intend to be the first to make it happen,” Dara Khosrowshahi, Uber’s chief executive officer, wrote in a letter.

Starting Tuesday, 15 cities in the U.S. and Canada will be able to use “Uber Green” and pay an extra $1 for a ride in a hybrid or electric vehicle. Drivers using hybrid vehicles will earn an extra 50 cents per ride and those in fully electric vehicles will get $1.50 per ride.

Riders in London have already been paying a “clean air fee” that has provided Uber with $100 million to help drivers buy EVs. Now Uber is extending a similar scheme for rides across France.

Uber hasn’t disclosed the amount of carbon dioxide it now emits so it’s not clear how many tons it would eliminate under its new targets. The company expects to reveal its annual emission number in the next few weeks. But given that its ridership, and presumably its emissions, had been rising rapidly before the pandemic, Uber will have to bend the trajectory of emissions in the other direction quickly to meet its 2040 target.

Transportation has the fastest-growing emissions among economic sectors, according to Andrew Steer, chief executive officer of the World Resources Institute. Beyond transitioning to EVs, Uber is committing to making it easier for app users to find other low-carbon alternatives like public transit or the company’s electric bikes from Lime, a company partially owned by Uber.

“When demand is forecasted to increase exponentially at the same time that emissions have  to be reduced dramatically, innovation from corporations like Uber becomes critical to decarbonizing the transport sector,” said Christiana Figueres, founding partner of Global Optimism and former UN chief climate negotiator.

A company spokesman said that Uber will not use carbon offsets to lower emissions from its rides—a practice that’s been looked down upon by environmentalists because offsets don’t always deliver on their carbon promises. Uber will only use carbon offsets for corporate emissions, such as air travel, that it cannot cut through alternative means. As part of its pledge, Uber promised to cut all emissions related to its own operations by 2030. 

But all that means Uber’s climate goals are dependent not just on the company’s own innovations, but also softer measures such as education and engagement. That will require convincing drivers to switch to electric cars and then working with governments to ensure that there is enough carbon-free electricity available at all times in all the countries Uber operates—whether San Francisco, New Delhi or Abuja.

©2020 Bloomberg L.P.