Uber Fails to Pay Some Electric Car Bonuses, Citing Glitch

Uber Technologies Inc. failed to pay some of its drivers special bonuses for using electric vehicles, part of a broad plan designed last year to put more electric cars on the road.

Uber attributed the lapse to a technical error and began making payments after being contacted by Bloomberg Green. The missed bonuses are a rocky start to a green strategy that needs to be much more ambitious to reach its targets, according to some transportation experts.

Uber spokeswoman Lois Van Der Laan said in an email only a “small group” of its EV drivers were impacted, adding that those individuals were now being paid 110% of their owed money “to make it right.” She declined to specify how many drivers in total hadn’t received the EV bonus or how much money had been repaid.

Bloomberg Green spoke to eight drivers who were missing payments; after Uber’s admission of error, seven were repaid, including a man who received over $1,000, according to pay stubs. The eighth driver said he hadn’t received his bonus.

Uber has pledged to transform its fleets in North America and Europe to 100% electric vehicles by 2030. To help meet that goal, the ride-hailing giant promised in September to pay drivers of electric vehicles in the U.S. and Canada an extra dollar per ride. The program, called its “zero emissions incentive,” is worth several thousand dollars for a full-time driver over the course of a year.

“They need to put their money where their mouth is if they want to get drivers to move into EVs,” said Ron Grant, an EV driver for Uber in Antioch, Calif., who did not receive the incentive payment for weeks before finally getting a $347 retroactive payment on March 9.

Bruce Schaller, a former transportation official with New York City who has studied the impacts of the ride-hailing industry for years, said the turbulent foray into EVs is a sign that Uber and its competitors—who have promised  investors they’d turn a profit this year—are unlikely to spend the kind of money needed to help large numbers of their drivers into pricier electric vehicles. “So far, the track record isn't very encouraging,” he said.

The payments mark the end of a weeks-long ordeal for several EV drivers who called and emailed Uber’s driver-support center to inquire about the missing bonuses, but were rebuffed when support staff didn’t seem to understand the company’s own EV incentives.

Andre Fortin drives a Tesla part-time for Uber in Los Angeles. When he emailed Uber’s support staff on March 5 to ask about the missing $1-per-trip EV bonuses, he was sent away empty-handed with a response that “promotional offers often fluctuate” and are based on local factors. Fortin received a retroactive payment of $689.70 on March 9.

Uber, like other ride-hailing companies, has come under increasing pressure to curb their environmental impacts. Worldwide, the industry utilizes over 11 million cars and is responsible for emitting about 60 million metric tons of CO₂ each year—more than the countries of Switzerland or Sweden—according to an estimate from BloombergNEF, a clean-energy research firm.

About half of all ride-hailing trips in the U.S. displace cleaner forms of transport, such as public transit, walking or biking; or are trips that otherwise wouldn’t have happened, according to researchers at the University of California, Davis. Meanwhile, ride-hailing drivers spend about 40% of their time motoring without passengers, further adding to the industry’s pollution. All told, each ride-hailing trip causes about 69% more heat-trapping emissions than the trips they displace, according to a report last year from the Union of Concerned Scientists.

To address these growing concerns, both Uber and its main U.S. competitor, Lyft Inc., unveiled major environmental pledges last year. Lyft went first in June, committing to transition all of the drivers on its network to electric vehicles by 2030. But the company provided scant details for how it would accomplish such a dramatic shift. At the moment, EVs comprise about 0.3% of the overall ride-hailing fleet in the U.S., according to BloombergNEF.

Lyft declined to provide financial incentives to encourage drivers to purchase EVs, which cost several thousand dollars more than comparable gas-powered cars even after government subsidies. “All options are on the table,” said Sam Arons, Lyft’s director of sustainability, when asked if the company would add financial incentives for EV drivers. “What I think we need to see here is lots of experimentation and lots of different ideas being tried out.”

When Uber made its own emissions-cutting pledge three months later, it offered two specific financial rewards to drivers. First, it rolled out Uber Green, where riders can request to ride in a hybrid or electric vehicle and pay an additional $1, with 50 cents of that going to the driver. In a second incentive, which is completely separate, Uber said it will pay every driver of an electric vehicle an extra $1 each trip.

Between the two incentives, an EV driver could pocket an extra $1.50 per trip. By Uber’s own estimate, that could add up to more than $4,000 per year.

Six months later, Uber drivers report that the rollout has been choppy. For starters, drivers say that passengers rarely click on Uber Green, the function that allows riders to voluntarily pay more for a clean vehicle and adds 50-cents per trip to drivers. The function remains buried on the second screen of the app’s offerings and few customers seem to know about the option.

“It’s like being on the second page of Google search results. Does anyone ever see that?” said Kurt Halfyard, a Chevy Volt driver in Toronto who said he’s gotten two Uber Green requests for a combined $1 over the past several months.

Some drivers who received belated EV bonus payments from Uber said it added up to a considerable amount. Shannon Johns, who drives a Tesla full-time for Uber and Lyft in Brentwood, Calif., received a retroactive EV-incentive payment for $1,108.80 after Bloomberg Green’s inquiry.

“I was surprised by the amount,” he said. “I didn’t know I was missing out.” He plans to use the money to travel to the East Coast to visit his daughter.

Drivers who have gotten the $1-per-trip incentive all along say it’s a nice perk. For Curt Kinder, who drives a Chevy Bolt for Uber and Lyft in Jacksonville, Florida, Uber’s EV bonus—which he has been receiving without problems—amounts to a raise of about 10% to 15%. “They’ve put something behind it,” said Kinder.

Still, it’s unclear if a small incentive tacked onto each ride will encourage many drivers of gasoline cars to shoulder a greater upfront cost to switch to an electric. After all, a recent survey by industry blog The Rideshare Guy found that drivers for Uber and Lyft make about $13 per hour, after expenses. That’s roughly the same pay-rate as farmworkers and short-order cooks, according to the Bureau of Labor Statistics.

Uber and Lyft have been working to address other aspects of this daunting financial equation to get drivers into emission-free cars, including negotiating discounts with automakers. But experts caution that Uber and Lyft have a long way to go before this begins to look attractive to hundreds of thousands of ride-hailing drivers.

“Drivers are very work-a-day, practically-minded, bottom-line focused people,” said Schaller, the former New York City transportation official. “Ultimately, Uber and Lyft need to have higher fares to pay drivers adequately and to meet these sorts of goals.”

©2021 Bloomberg L.P.

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