Uber wants to help charge SA’s switch to electric vehicles

Ride-hailing service Uber says it’s unable to make a firm commitment to reducing the number of traditional vehicles in its SA operations because of the government’s slow progress in implementing policies that would help to increase the use of electric vehicles (EVs). 

The EV revolution over the past decade has seen market leader Tesla’s market capitalisation of about $600bn (almost R11-trillion) surpass that of industry stalwarts VW, Toyota, General Motors and Mercedes-Benz combined.

SA, though, largely has been left behind because of the dire state of electricity supply and high import taxes that continue to keep EVs out of reach for most South Africans.

The result has been minimal investment in the ecosystem, including vehicle sales, repairs and maintenance, as well as charging infrastructure.

Uber recently set itself the ambitious goal of having all rides on its platform being undertaken by EVs by 2040, in line with a number of countries and organisations that have made similar pledges to reducing carbon emissions.

But for now, the world’s largest ride-hailing platform hasn’t set a firm targets on achieving the same in SA owing to the current lacklustre state of the country’s EV market.

Speaking to Business Day, Frans Hiemstra, Uber’s GM for Middle East and Africa says certain milestones still need to be reached in SA.

“The challenge today is that EVs aren’t priced at a point where it makes economic sense [for ordinary people]. We’ve seen it [happen] in other places. It can get there,” he said.

“We think very carefully about total cost of ownership and a lot of it is dependent on third parties outside Uber. So [through] these deals with OEMs [original equipment manufacturers], we’ve managed to to start getting scale globally, which is very important to chip away at a piece of the of the affordability EVs.

“Then we work with with policymakers. The right incentives need to be put in place which we’ve seen in a number of markets, to actually incentivise people to purchase EVs.”

The US, Europe and China offer various incentives to encourage more people drive EVs and discourage the use of internal combustion engines.

Various cities and countries also have plans to ban, restrict or impose levies on internal combustion engine-powered vehicles to cut pollution. In London, motorists with “older, more polluting vehicles” are charged a R300 daily levy to drive in the city. 

The incentives have made it possible to set a firm target in Dubai, one of the markets under Hiemstra’s watch. 

“We made a specific commitment in Dubai, last year. We want 25% of kilometres driven to be electric by 2030. We’d love to do the same in SA. There are a few moving pieces that would need to fall into place before we can stand by a specific SA commitment.”

Uber is part of a collective called Go Green Africa, which is lobbying the government to implement favourable policies that would encourage the use of EVs in SA. Hiemstra says engagements with Western Cape officials in that regard have been progressive. 

According to a recent report released as part of the SA Just Transition and Climate Pathways study, SA would have to ban the sale of new internal combustion vehicles by 2035 and shift at least 15% of road traffic to rail if it is to meet its globally committed climate goals. 

The report says transport in SA is the third-largest emitter after the energy and the metals sectors, contributing about 10% of total emissions.

About 90% of transport emissions are vehicles. The report says there are about 8-million passenger vehicles on SA’s roads, more than 300,000 minibus taxis, about 60,000 buses and 3-million freight vehicles.

Besides national policy, Hiemstra says EVs would be a cheaper option for the more than 40,000 estimated ride-hailing drivers in SA because of rising traditional fuel costs and the cheaper cost of charging vehicles. 

With Denene Erasmus

gavazam@businesslive.co.za