August 8, 2022

California Just Passed a New Environmental Mandate That Could Ruin Uber

It’s almost impossible to see a scenario where this doesn’t lead to much higher prices for consumers.

California’s war on the gig economy continues. After past labor regulations nearly prompted Uber to entirely abandon the state until they were essentially undone by voters, Golden State regulators have a new plan to attack ride-sharing services—this time in the name of environmentalism.

The California Air Resources Board just unanimously voted to mandate that Uber and Lyft rides must almost entirely switch to electric vehicles.

“California’s clean air regulator on Thursday adopted rules to mandate that nearly all trips on Uber and Lyft ride-hailing platforms have to be in electric vehicles over the next few years, the first such regulation by a U.S. state,” Fox Business reports. “The rules… mandate that EVs account for 90% of ride-hailing vehicle miles traveled by 2030.”

Make no mistake: This is a drastic switch. Right now, only a tiny fraction of cars on the road are powered by electricity. And electric vehicles, despite enormous government subsidies, continue to be significantly more expensive than the typical vehicle.

Yes, these regulators may have noble intentions and earnestly hope to help the environment. But using government force to arbitrarily speed up the ride-sharing industry’s transition to electric cars (which they are already planning on doing) will hurt drivers and riders alike.

Forcing those who seek the flexible work provided by ride-sharing apps like Uber and Lyft to buy expensive new electric vehicles will lock most working and lower-middle-class folks out of the market. This could lead to a driver shortage by shrinking the pool, and many of those who can afford electric vehicles are likely already entrenched in advanced professions that pay more than driving. 

Regardless, the initial genius of Uber was connecting idle car owners with those who need transportation. When you ban most existing cars from being used, you undercut the very system that made ride-sharing such a significant societal and economic advancement. 

Moreover, it’s almost impossible to see a scenario where this doesn’t lead to much higher prices for consumers. Uber already does not make a profit, so arbitrarily increased costs of doing business will have to come from somewhere—and the most likely source is customers’ wallets.

We can already presumptively add this latest expansion of California’s nanny state to the long list of well-intended regulations that ended up leaving us all worse off.

This article, California Just Passed a New Environmental Mandate That Could Ruin Uber, was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.