Spring Free EV Hopes To Get Uber Drivers Over The Hump Of Up-Front EV Buying Costs

Electric vehicles cost a lot less to operate than gasoline ones. Electricity’s cost per mile can be a quarter of the cost of gasoline in similar cars, and maintenance and repairs cost less as well. That’s an obvious win in most cars, but especially in working and fleet cars which drive more miles than personal cars.

Even so, EV adoption has been mostly with consumers. Earlier I wrote about “Why your Uber isn’t an EV” to outline many reasons that’s true, but one of the primary ones is that EVs are more expensive than comparable gasoline cars, even if the total cost of ownership, when you combine purchase price and operating cost, is lower.

One would think that total cost of ownership is what should matter to everybody, but we’re not so rational. Lower income individuals just can’t easily gather the money to buy a more expensive car, even if it will save them money. Corporations put purchases and operating expenses into two different budgets and manage them differently.

Spring Free’s plan is to let people pay for EV purchase by the mile, and their main targets are fleets, and owner/operators who drive for fleets, like Uber and Lyft drivers. That’s appropriate, because the founder, Sunil Paul, was the founder of “Sidecar” which was actually the first company to do what UberX does, before Uber or Lyft. Sidecar failed due to heavy, extremely well funded and, according to Paul in some cases, underhanded competition from Uber. One noticeable difference about Sidecar was you had to enter your destination to book a ride, something that was not the case with Uber of Lyft, though which they now all do. Knowing the destination allowed not only pricing of the ride in advance, but the drivers could actually set their own prices, including offering discounts to get them in the direction they were going.

Paul is back on a quest to reduce global warming, and has identified improving EV adoption as a key tool. While he hopes to see wide adoption among gig drivers, their first push will be towards fleet managers to help them simplify accounting and presumably justify their decision. By switching from a large capital expenditure to a low rate per mile they can make more things possible from a financial standpoint.

Spring Free is not yet planning to include electricity in the per-mile cost. Everybody is used to paying for energy as you drive (or every few days as you fill up) so the economics of that don’t change. Even so, this can be worth doing for those who want to control their costs. Cost-conscious Uber drivers are usually seen in a Toyota Prius or similar, which has the lowest fuel costs for a gasoline car. Indeed, the Prius can cost slightly less for gasoline than an EV will cost if you try to fill it only at certain fast charging networks which cost 55 cents/kwh or over 13 cents/mile.

Even so, I think there would be value in selling EVs to people with an all-in price, calculated to make it very clear that they save money over the similar gas car. Tesla promotes this by listing the price of their cars “after savings” but that’s not enough. You need to make it real. To make it real you would price exactly the same way. Customers would buy or lease a vehicle at the same price (or lower) than a gasoline car. Then, they would be need to do all maintenance at listed shops (there really isn’t much maintenance) and all charging through known charging stations — including of course, the one in their house if they have one. They would pay a bill for this maintenance that was lower than the bill with a regular car, though higher than its actual cost, and they would pay for the electricity at a price that was higher than the actual cost of electricity, but cheaper than the cost of filling up. They might even be given a visualization of “filling up” on their phone that showed a gas pump spinning “gallons” with a lower price per gallon than is at the real pumps today.

It’s a bit of trickery, but in the end, nobody could go away not feeling they had saved money. Well, if they did save money, of course. There certainly are electric cars that are premium and expensive and must be compared to fancier gasoline cars. And there are expensive places to charge that would need to have the simulated gas pump show a higher price.

To do this, you would need to integrate with the software in the car, to know everywhere it charged, and what the driver paid for the electricity. For most charging networks, one would integrate and manage payment for the electricity. At home, the household would still pay its electrical bill, and the driver would get credit. There’s a bit more work for charging at unusual locations — in particular places that give you free charging which you now have to pay for, though the use of a special credit card for use at charging locations that take credit cards would solve almost all problems.

The expensive charging networks are a problem because they can be more costly than gasoline. Cheaper maintenance can save the day, but it is important that drivers avoid those stations except when needed. One solution might be to make bulk price deals with those networks by telling them, “If you don’t give our drivers a better price, we will make your stations have a surcharge and drivers will stay away from them.”

Robotaxis too

This sort of model may also be valuable in the robotaxi world, which requires that customers treat it as a car replacement rather than an occasional taxi. If a robotaxi costs 50 cents/mile, that may be similar to the all-in cost of a new car, but people won’t see it that way. In Silicon Valley, the 100 mile round-trip to San Francisco, if priced at $50, would be a hard price for people to swallow if just going up for a meeting, party or dinner. That’s true even if that’s the cost in regular car ownership. If you can subscribe to a robotaxi service for a flat monthly fee less than a lease payment, and get miles in “tanks” that are cheaper than gas, and insurance and maintenance in similar ways, the cost can make more sense to the customer when comparing it to car ownership. This is particularly true when the cost becomes lower than the cost of owning a car. Parking of course is another big win for the robotaxi to help seal this deal.

Maintenance

Maintenance on electric cars is generally very low, especially compared to the recommended maintenance schedules on most gasoline cars. I’ve owned a Tesla for 3 years and maintenance was very close to zero — replacing one internal air filter and filling the wiper fluid. That changed when I needed new tires, though, and it took away a fair bit of that advantage though did not eliminate it. EVs are heavier and have zippy acceleration, and that can wear out tires much faster. My tires were worn out after 25,000 miles instead of the 50,000 they should be good for. And they are not inexpensive tires. They would have lasted better if I had been regular about rotating them. That happened because of an ironic reason; because the vehicle was never going in for maintenance, the usual rotations happening at those visits was not happening. With no oil changes or 7,500 mile maintenance visits, you need to go to a shop for no other reason than tire rotation, which is easy to let slide. A lesson for EV owners. In time, this situation will improve. Some car maintenance shops are a bit scared of what the low maintenance needs of EVs mean for their business.