Uber has purchased 50,000 Tesla vehicles for its drivers to rent as part of its ambitious plan to electrify the US fleet by 2030. Uber is partnering with Hertz, a rental car company that announced yesterday it had ordered 100,000 Teslas.
This move comes as transportation providers and car companies around the globe are under increasing regulatory pressure to switch to zero-emission vehicles. California, the US's largest auto market, has set regulations for ride-hailing companies such as Uber and Lyft requiring that 90% of their fleets must be electric by 2030.
Uber offers discounts for drivers who don't own a car. Hertz and Uber have been working together since 2016 to create such a program. They have not yet rented out a specific vehicle to drivers, but they have collaborated in the past.
Uber drivers will pay $334 per week to rent a Tesla Model 3 by Hertz
Uber drivers living in Los Angeles, San Francisco, San Diego, San Diego, or Washington, DC will be able to rent a Tesla Model 3 through Hertz starting November 1. The rate is $334 per week, which includes maintenance and insurance. Uber claims that the weekly rate will drop to $299 as the program begins. The program will be expanded nationwide over the coming weeks, with Uber aiming to have all 50,000 Teslas on Ubers platform in 2023.
Uber admits it may be hard to find drivers for the program, with a weekly fee of $334. However, they are confident that drivers will benefit from fuel savings and lower maintenance. Drivers who pick up passengers using hybrid or electric vehicles receive 50 cents more per ride. Drivers who use battery-electric vehicles, however, get an additional dollar per ride for a total $1.50. According to Autos.com, the average Hertz rental car costs between $150 and $325 per week.
To rent a Tesla, drivers must first have a minimum 4.7-star rating. They also need to have made at least 150 trips. Drivers will be able to recharge using Tesla's Supercharger network. They also have discounts at participating EVgo charging points.
Uber pledged last year to be 100 percent electric in the US, Canada and Europe by 2030, 2040, and 2025 for the rest. Uber also stated that it would invest $800 million in helping hundreds of thousands of drivers across the US, Canada and Europe switch to electric vehicles by 2025. However, a spokesperson refused to disclose the financial details of the deal with Hertz.
Uber's record in car rental and leases is not perfect. After drivers complained that they were racking up excessive amounts of debt, Uber shut down a subprime program for auto lending. Uber says that the new program is targeted at drivers who rent, and not drivers who want to change from owning to renting.
Ride-hailing was initially promoted to the public as an environmentally friendly alternative to owning a car. It turns out that the reverse is true. Numerous studies show that ride-hailing trips cause approximately 50 percent more pollution than traditional car trips. Worse, more than half of all ride-hailing trips to major cities are made from people who could have used cleaner modes of transportation to reach their destination.
According to Bloomberg, today, however, less than 1% of ride-hailing cars in the US are currently electric. Even though electric vehicles still account for less than 5 per cent of the annual auto sales, the auto industry is undergoing a major transition to electric cars.
Uber is not the only company that uses Teslas for ride-hailing. Moped rental company Revel launched its Uber-esque ride-hailing service in New York City earlier this year with 50 brightly colored Tesla Model Y vehicles.
