Uber will pay drivers $4,000 to switch to EVs

As it rushes to meet its pledge for “100 percent” of trips in electric vehicles by 2030, Uber is offering grants of $4,000 for drivers to swap their gas-guzzlers for zero-tailpipe emission vehicles. The company is also dropping its “Uber Green” branding in favor of the more simple “Uber Electric.”

Uber has said it will be completely carbon neutral in North America and Europe by 2030 and in all global markets by 2040. But when it first announced this pledge in 2020, it said it wouldn’t directly pay drivers to ditch their gas-burning vehicles in favor of EVs. Now, the company is reversing that decision in the hopes that direct payments can help accelerate EV adoption.

The reason for the switch is not that surprising. The recent expiration of the $7,500 federal EV tax credit in the US is expected to put a serious dent in EV sales, which will make it harder for Uber drivers to make the switch while also keeping their costs inline. Uber’s new offer is aimed at softening the blow for many drivers who relied on the credit for both used and new EVs.

Not every driver will be eligible for the grants, at least not initially. As part of Uber’s new “Go Electric” program, drivers in New York City, California, Colorado, and Massachusetts can apply for $4,000 when they switch to a new or used EV. When combined with local incentives, like Massachusetts’ MOR-EV and Colorado’s Clean Fleet Program, EV prices can drop even further.

Uber notes that the $4,000 amount was the same as the recently expired federal tax credit for used EVs. Through “Go Electric,” Uber is hoping to make up for the loss of the tax credit by putting up its own money for EV purchases.

It’s been a bumpy ride for Uber in its quest to eliminate gas guzzlers from its platform. During the EV exuberance of 2021, rental company Hertz announced the purchase of 100,000 Teslas and 65,000 Polestars, with the aim to rent some of them to ridehail drivers. But high rates of depreciation led Hertz to reverse the deals and offload most of its EVs it had already acquired.

Uber notes that the $4,000 amount was the same as the recently expired federal tax credit for used EVs

But Uber has stuck to its commitment to get more drivers in EVs. Last year, the company announced a partnership with Chinese auto giant BYD to put drivers in 100,000 EVs in Europe and Latin America. There are currently 200,000 EV drivers on Uber’s platform globally, the company says.

Of course, getting the hundreds of thousands of people who drive for Uber to switch to electric vehicles will be no easy task. Ridehail drivers are classified as independent contractors, and many use their personal cars to drive for not just one but several gig economy companies. Uber can’t just force all its drivers to make the switch without jeopardizing their status as freelancers. Also, EVs tend to be more expensive than gas vehicles, despite costing less to fuel and maintain. That steep upfront cost may make it a challenge for many drivers, who typically operate with incredibly tight margins.

Earlier this year, Uber said that Uber Green, the company’s EV and hybrid ridehailing product, would become an EV-only feature. Previously, Uber Green featured both electric and hybrid vehicles, offering an extra per-trip fee (usually $1) to drivers who used any vehicle with less tailpipe pollution. Now, under the Uber Electric branding, the company is offering discounts to riders of 20 percent, or up to $8 off, for EV rides with the code GOELECTRIC20. (The offer is valid for seven days.)

Uber is also expanding its battery-aware matching feature to more EV brands. The feature filters trip requests based on an EV’s battery level so drivers can accept trips that end near a charger or avoid trips that are too long for their battery. The feature is now launching in 25 countries in the US, Canada, and Europe. And it will now support EVs from Kia, Hyundai, Ford, Nissan, Volkswagen, and Mercedes-Benz.