California Passes A New Rule Forcing Rideshare Companies – LYFT Inc (NASDAQ: LYFT) And Uber Technologies Inc (NYSE: UBER) To Switch To Electric Vehicles

California is the first state to implement CMS (Clean Mile Standard) in the US. The new law mandates ridesharing companies – LYFT Inc (NASDAQ: LYFT) and Uber Technologies Inc (NYSE: UBER) to transition to electric vehicles from gasoline-based vehicles.

CMS will be effective from 2023

According to a communiqué from CARB (California Air Resources Board), the state will implement CMS in 2023.

CARB mandates 2% of the vehicles on the roads of California to be electric vehicles (EVs) in 2023, gradually increase the use of EVs by 50% in 2027 and 100% by 2030. It expects to reduce carbon dioxide levels to 0.36 MMT (million metric tons) in 2030. The cumulative carbon dioxide reduction will be 1.81 MMT between 2023 and 2030.

CARB also says the new mandate will reduce atmospheric pollutants like ultra-fine PM 2.5 particles to 93 tons. It also lowers harmful nitrogen oxide levels by 298 tons soon. 

Additional measures are required to achieve the greenhouse gas (GHG) emissions reductions by 2030. CMS report says GHG emissions are rising significantly despite reducing the carbon content in fuel and implementing stringent emission standards. 

CPUC will implement CMS

According to the CMS report, CPUC (California Public Utilities Commission) will find ways to implement new regulations and facilitate switching drivers to electric vehicles.

Lyft and Uber treat drivers as independent contractors in the US. As a result, drivers need to either rent or buy their vehicles for ridesharing services. It mandates CPUC to ensure the availability of affordable EVs to low-income drivers besides providing charging points. 

Lyft and Uber control the rideshare market in California

Both Uber and Lyft control the rideshare services in California. They already revealed plans to transition to EVs by 2030 and free the environment from GHG.

In June 2020, Lyft, which commands one-third market share in the US, said it would convert all of its fleets to EVs by 2030. It seeks the cooperation and support of government entities, industries, and non-profit organizations to achieve 100% EVs.

Uber holds a two-thirds share in the rideshare market. The company announced plans to convert all of its fleets to 100% EVs in the urban regions of Europe, Canada, and the US. 

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Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on Wallstreetpr.com as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at nmaithya@gmail.com or follow Nicholas Kitonyi @nmaithyak on Twitter.

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