Uber, Lyft drivers switch to Teslas amid high gas prices

Yahoo Finance's Dan Howley joins the Live show to discuss Uber and Lyft drivers switching over to EVs amid rising gas prices.

Video transcript

AKIKO FUJITA: Uber and Lyft drivers are switching to EVs as the price of gas continues to rise. Yahoo Finance's--

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--Dan Howley here with the details. Dan, this kind of feels like you know, what we're seeing in the rest of the market, with more and more drivers or more and more-- yeah, and more drivers going to buy EVs. Now we're seeing it in the ride-sharing space as well. I mean, how big of a shift are we talking about?

DAN HOWLEY: Yeah, we're talking about you know, upwards of more than 100% shift you know, over to EVs, at least with people renting EVs. You know, we're seeing both Lyft and Uber drivers, they have-- Uber has a deal with Hertz where they can provide Uber drivers with some Teslas or some EVs for a set price. And some drivers are finding out you know, despite that being in the hundreds of dollars range for that kind of rental, it's still beating out the cost that it requires them to fill up at the pump.

And you know, that just speaks to the fact that, obviously, gas prices are incredibly high right now, despite coming back ever so slightly. You know, depending on where you are in the country it really can just be too much for the average driver. And taking that leap to go and rent a Tesla or go and purchase an EV is really the only solution for a number of these drivers.

And so it's not just the rentals though, and it's not just the fact that Teslas are you know, yes, there's the Model 3 that's supposed to be for everybody, still rather expensive though. There's also the fact that the prices for EVs at dealerships at least outside of Tesla are rising or higher than MSRP. So you know, they're still going forward with these moves just to ensure that they're able to at least put more money on the table than they would if they were having to dig deeper into their pockets to pay for gas.

You know, just anecdotally, I mean, I've seen far more Teslas being driven here in Queens for Uber or Lyft than I have ever before. Usually what you see is basically the go-to car is a Toyota Camry. I mean, every time you call a Lyft or an Uber, it's going to be a Toyota Camry. I think you know, 9 times out of 10, maybe not you know, that often but. And now it's becoming more and more likely that you may see an EV. So we'll likely see that trend continue for some time.

But you know, as we start to see or continue to see the prices for those kind of rise as a result of the problems that we've seen in supply chain with vehicles getting to shores, you know, there's got to be a point where Tesla drivers or Uber and Lyft drivers rather, kind of hit a wall and say, you know, the price is too much for gas, the price is too much for an EV, where am I supposed to go now?

BRIAN CHEUNG: Dan, I guess as a follow-up here, are there incentives? Because I would imagine that you know, maybe Uber and Lyft would want people to be taking EVs when they do ride. Of course, they don't always have a choice in what vehicle they ride in, it's the closest available. But is Uber and Lyft offering details on this? Are they trying to push drivers to go greener? Because regardless of the gas price, I mean, there is an environmental aspect to this as well.

DAN HOWLEY: Yeah, Uber can offer drivers $1 more for each ride when they use an EV. Both of these companies are trying to make sure that their entire fleets of vehicles are electric in the coming decade. And you know, that seems to be a tall order. As I said, you know, 9 times out of 10 you would see a Toyota Camry roll up, or you know, maybe a Honda CRV, something like that. The vast majority of them are still gas-powered vehicles. So you know, the fact that they're incentivizing drivers with I mean, $1 per ride, that doesn't really seem to me to be the kind of thing that they would want, at least it would get people to move over to EVs.

I think really the thing that's doing it now obviously is the gas prices. Those may come down though, you know, that's the ideal, right? That they come back down and gas becomes somewhat more affordable. At what point then do the drivers say, well, I guess I don't need that EV?

The other thing to point out, though, is that recharging EVs keeps drivers off the road, you know, sometimes upwards of you know, 45 minutes to an hour while they recharge, if they can find a charging station that's convenient for them. With a gas-powered vehicle they just roll up, fill up, five minutes later they're out back on the road getting customers. So you know, it's this kind of cost-benefit analysis that these drivers are having to deal with now.