Is Ride-Sharing Sustainable?
Climate change is slowly but surely becoming the hottest (pun intended) topic of public debate. Consequently, pollution, sustainability, green and eco-friendly living are attracting more interest than ever. Every new product or service goes through these filters, and the shared economy is no exception. We’re sure you’ve asked yourself more than once: Is ride-sharing really sustainable?
We’ve asked ourselves the same thing so we decided to do some research and try to find the right answer. Ride-sharing started precisely as a way to preserve resources, decades ago, but more recently it rose to success by offering a more convenient alternative to taxis and, to some extent, to other means of transportation. In 2015, PricewaterhouseCoopers anticipated that by 2025, the global sharing economy’s (travel, car sharing, finance, staffing, and music and video streaming) revenue would grow to roughly $335 billion, compared to approximately $15 billion that year. Two years later, the ride-sharing market was valued at approximately $51.3 billion and was expected to reach nearly $221 billion by 2025, according to Kenneth Research. The industry’s anticipated annual growth rate varies between 9 and 20 percent, depending on the research organization.
This just goes to show that all conditions are favorable for this sector to grow even further. Millennials and Gen Zers love the convenience of using such tech-powered services. However, the same users are also starting to value how friendly all these services are to the environment. The fact that transportation is now officially the biggest source of pollution is old news. Specialists claim that burning one gallon (nearly four liters) of gasoline produces roughly 20 pounds of carbon dioxide, which means that the average vehicle produces 6 to 9 tons of carbon dioxide per year. Half of all carbon dioxide emissions in the U.S. are created by passenger cars and light-duty trucks, says the Center for Climate and Energy Solutions.
Technically, ride-sharing should help reduce the number of cars on the road. On average, sharing a ride with one other person to work and back will reduce greenhouse gas emissions by 3.72 kilograms (8.2 pounds), according to Transport Canada—the government’s transport department. Ride-sharing to work for a year, for example, would lead to reducing greenhouse gas emissions by approximately 893 kilograms (nearly 2,000 pounds). Not bad, right?
The counter-argument is that most riders in the ride-sharing business are not people who would otherwise drive to work, but those who would bike, walk or take public transport. In this case, the service is not exactly eco-friendly or sustainable. According to Schaller Consulting, only about 20 percent of riders are part of the first category, while about 60 percent belong to the second. The remaining 20 percent are the ones replacing taxis with rise-hailing.
Still, sharing a ride to work is still considered a top solution for a greener commute, along with bike-sharing, smart pricing for roads and parking, and others. A study conducted by the Transportation Sustainability Research Center at the University of California, Berkeley, shows that for each car-sharing vehicle on the road, there are on average from 9 to 13 fewer cars in traffic. Also, ride-sharing helps reduce car emissions between 34 percent and 41 percent per year for each household using the services. Not to mention the fact that it also contributes to a decrease of nearly 10 percent of total carbon dioxide emissions from cars. Not bad.
Another aspect of the story is the efforts made by the companies in the business to reduce the impact that transportation has on the environment. Last year, Lyft made all rides on its platform carbon neutral by buying carbon offsets—investing in projects that reduce greenhouse gas emissions such as restoring forests, new generation automotive production or modernizing power plants. The company promised more to come in this direction. Others, like Bolt (previously Taxify), are placing their bets on electric vehicles. Recently, the firm’s CEO was quoted saying that the future is electric.
Going forward, companies that haven’t done it yet will need to include this sustainability dimension into their business plans if aiming for long-term success and growth. As for now, ride-sharing can be considered a sustainable commute solution as long as it’s done right: actually sharing the ride with other users, choosing electric vehicles when possible or at least companies that invest in green solutions for a better tomorrow.