The hidden environmental threat from Uber and Lyft

By JB Tengco and Kathryn Phillips, Special to CalMatters

The popularity of app-based ride-hailing services, car sharing, personal car rentals and other transportation innovations are a sign that a new generation of Californians is shedding reliance on the personal car as its sole means to move about. 

This trend is creating a grand opportunity for California to make progress reducing smog-forming, climate-warming emissions from the transportation sector, which produces about 40 percent of greenhouse-gas emissions in the state.

But that opportunity could be squandered because of an unanticipated problem: the employment practices of ride-hailing companies. The California Supreme Court ruled in 2018 that those practices violate California’s basic worker protections.

Transportation network companies, primarily Uber and Lyft, account for an increasing share of vehicle miles traveled in our urban areas—more than 13% in San Francisco. 

To make sure that this new transportation option doesn’t lead to more pollution, the Legislature passed a law in 2018 to establish emissions-reduction targets for the industry.

Beginning in 2023, these companies will be required to reduce their cumulative climate pollution, and the state will establish a system of incentives and mandates to increase the use of zero-emissions vehicles.

Similar strategies are already in place for other entities responsible for dispatching large fleets of vehicles onto our streets. Transit agencies across the state are transitioning to all-electric buses. 

By next year, UPS intends that one in four of the trucks it purchases will be advanced technology vehicles. The U.S. Postal Service plans to cut its fleetwide emissions by 30% by 2025.

These strategies work when the marginal increased capital costs are spread across the system. Experience has shown these strategies do not work when companies are allowed to shift the costs onto their employees by misclassifying them as “independent contractors.”

That is what has happened in port trucking, where state efforts to reduce the industry’s intensive diesel emissions have been stymied by employment practices that require low-wage truck drivers, rather than the trucking companies and large shipping companies for which they work, to bear the entire cost of compliance.

The same scenario would surely play out in the ride-hailing industry if transportation network companies, like Uber and Lyft, are allowed to continue to treat their drivers as independent contractors.

Transportation network companies put cars and drivers on our roads. That is the foundational element of their business model. These cars put significant additional carbon emissions into our air.

The network companies’ existing employment structure has allowed them to pass on all the externalized costs to their drivers—for fuel, idle time while waiting on fares, and vehicle maintenance.

There is a social cost as well in the form of harm to the environment. 

With the 2018 law, a process is now in place to minimize that harm by transitioning transportation network fleets to zero-emissions cars. We know from experience with the trucking industry that such a transition will be thwarted if transportation companies are able to pass that cost onto workers who make below the minimum wage in California’s largest cities.

In the most highly watched action in its final month of action this year, the Legislature will decide the fate of Assembly Bill 5. That bill will place into statute the standards by which the Supreme Court says an employee is differentiated from a legitimate independent contractor.

Exemptions have been included in the bill to cover certain occupations, such as hair stylists or financial advisers, for which traditional employment arrangements don’t apply.

But by any established legal standard, drivers for transportation network companies don’t meet the independent contractor test. For them, there can be no exemption.

Enacting AB 5 would ensure that companies assume their responsibility to provide core employment protections to drivers and assume their lawful responsibility to pay for employee equipment.

With that assurance in place, California can move forward in its mission to clean the air and mitigate the climate crisis by reducing tailpipe emissions. It can seize the opportunity to ensure that today’s transportation innovations move all of us forward.

JB Tengco is the Western States Director for the BlueGreen Alliance, [email protected], and Kathryn Phillips is Director of Sierra Club California, [email protected]. They wrote this commentary for CalMatters.

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