Paying to depollute: The case of electric ride-hailing

Abstract

Electrification of vehicles is recognized as a key strategy for meeting global climate change targets and achieving a sustainable transport industry. Despite extensive efforts by governments worldwide, electric vehicle (EV) penetration remains low, suggesting that some disadvantages of this technology are significant barriers to consumer adoption. However, most of these barriers are associated with vehicle purchase and may not apply to rental or sporadic use. In this paper, unlike most of the existing literature that focuses on purchase decisions, we study the factors influencing EV adoption within a ride-hailing context. To achieve this, employ full real user data for electric and conventional vehicles for ride-hailing trips in Santiago, Chile. Since at the time of study the electric option is a still a very novel service, we first characterize the early adopter users, and we compare them to non-adopters. Our results align with those reported for EV purchases. For instance, higher-income individuals are more likely to adopt EV in the context of ride-hailing. This suggests that, even with fewer adoption barriers in ride-hailing services, significant inequalities in access or preferences may persist. Additionally, we find that frequent users of the ride-hailing service are more inclined to try the electric option. Then, we develop a binary choice setting to estimate the willingness to pay for the electric option. The explanatory variables include fare, trip time, and wait time of each alternative. The main result indicates that users choosing the electric option are willing to sacrifice a small amount of additional travel time and much more wait time to use that alternative. Additionally, for longer trips there is a higher probability that a user will choose the electric option. Finally, we conduct sensitivity analyses, finding that a lower EV market share drives up the willingness to pay, making the EV option less elastic.