“Even though this company grew out of a desire to solve a very common problem, you’ve put Uber in a position to help tackle some of the biggest challenges facing our cities in the years ahead.” – says Uber CEO Travis Kalanick at Uber’s 5th Anniversary. “It will be a cleaner city, where fewer cars on the road will mean less carbon pollution – especially since more and more Uber vehicles are low-emission hybrid vehicles.”
Is the climate change Uber’s true intention or just an argument in a battle against regulators? Clearly reducing carbon footprint and congestion became the main arguments in Ubers debate for favorable regulation.
According to Hedges & Company research the number of US Vehicles in Operation (VIO)  has reached 258 M cars. The typical car on the road in the U.S. is a record-high 11.5 years old. IHS Markit also forecasts 20 million vehicles on the road in 2021 will be more than 25 years old. 
In addition to environmental damage caused by gas production, these vehicles, especially older ones produce huge environmental pollution. According to the report of the US Environmental Protection Agency, light vehicles produce almost 26% of the country’s greenhouse gas emissions – second after electric power generation. Most of the greenhouse gas emissions from transportation are carbon dioxide (CO2) emissions. In 2016 projected carbon dioxide (CO2) emissions for passenger cars are 347 g per mile. 
There are several ways of reducing carbon dioxide emissions in transportation that include: switching to alternative and renewable fuels, using more fuel-efficient vehicles, reducing travel demand through better urban planning, biking and pedestrian programs.
Ridesharing – a service that enables passengers, moving to a similar location, share a ride and split the fare – is another way to lower emissions directly reducing the number of cars in the cities.
Uber Technologies Inc., an American on demand transportation company and the developer of an Uber taxi application, introduced its ridesharing service UberPool in September 2014: “Using uberPOOL has the power to transform the way people commute and think about getting around, into and out of the city. It can have incredible implications for congestion, pollution, urban parking and transportation costs — giving even more people an affordable alternative to personal car ownership.” 
Here is how UberPool can contribute to climate change:
- At full capacity a ride can be shared with up to 2 more people reducing potential emissions per passenger at least in half
- Gasoline consumption may decrease – now Americans consume 26,5 Mln Gallons per day 
- Large SUVs can be better utilized if the algorithms and sufficient demand will enable them to fit up to 6 passengers
- Since Uber has a quality control on cars (Only cars no older than 3-5 years allowed) it’s fleet is less polluting then private cars on average
In June 2016 Uber has completed its 2 Bn ride backed by more than $ 11,5 bn investments.  Along it’s path Uber has experienced various issues with government, taxi driver unions and tax authorities. While the state of Massachusetts managed to pass a law that places a 20-cent tax on each ridesharing trip in the state for the next ten years , in most of the countries the scheme of passing payroll taxes using labor as legal contractors is still under discussion.
How is the Uber responding to that? “All we ask of local officials is that they say yes to allowing people to serve their cities. All we ask is that they don’t deprive people of this service because of some outdated regulation – regulation that might have originally been designed to protect passengers or drivers, but decades later exists to preserve a century-old monopoly for a connected few.” – says Travis Kalanick, Uber CEO.
However, there are several concerns associated with Uber ridesharing. A research by University of California Transportation Center found that that 8% of passengers using taxi apps take trips they would not take without an app in hand.  Another problem is low utilization and dead mileage. From the authors experience in that industry – ridesharing apps still don’t have enough demand to enable “Perpetual shared ride” that is at least 60% utilized . Companies continue to heavily subsidize these rides making a bet on further demand growth and costs reduction. Another threat is replacing transit, walking and biking. Uber is experimenting at making trips even cheaper than a bus, selling monthly subscription on 40 trips for just 30$. 
Uber makes clear that it is playing a tremendous role in the future carbon footprint reduction. Will this model be financially sustainable? Will autonomous cars conquer mass market and make ride-sharing even cheaper? Ironically, the success of Ubers carbon emission depends on classic supply and demand balance and related unit economics.
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- Hedges&Company US Vehicles Database Records, 2016, https://hedgescompany.com/home4
- IHS Markit Press Release, IHS Markit, November 2, 2016, http://news.ihsmarkit.com/press-release/aapex/global-automotive-aftermarket-opportunities-continue-grow-ihs-markit
- Greenhouse Gas Emissions Factsheet, US Environmental Protection Agency, 2014, https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#transportation
- Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends Report Overview, US Environmental Protection Agency, 2016, https://www.epa.gov/fuel-economy/trends-report
- “UberPOOL San Francisco: Everybody’s In!”, September 2, 2014, https://newsroom.uber.com/us-california/uberpool-san-francisco-everybodys-in/
- S. Total Gasoline Retail Sales by Refiners, US Energy Information Administration, Aug 2016, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=a103600001&f=m
- Mike Isaak, “How Uber Lost More Than $1 Billion in the First Half of 2016”, New York Times, Aug 25, 2016, http://www.nytimes.com/2016/08/26/technology/how-uber-lost-more-than-1-billion-in-the-first-half-of-2016.html?_r=1
- Jared Meyer, “Don’t Believe Uber — Massachusetts’ New Ridesharing Tax Is Terrible”, Forbed, Aug 23, 2016, http://www.forbes.com/sites/jaredmeyer/2016/08/23/dont-believe-uber-bostons-new-ridesharing-tax-is-terrible/#12a7bf5e4664
- 5-Year Anniversary Remarks from Uber CEO Travis Kalanick, June 3, 2015, https://newsroom.uber.com/5-years-travis-kalanick/
- Lisa Rayle, Susan Shaheen, Nelson Chan, Danielle Dai, Robert Cervero, “App-Based, On-Demand Ride Services:
Comparing Taxi and Ridesourcing Trips and User Characteristics in San Francisco”, University of California Transportation Center UCTC-FR-2014-08, Aug 2014, http://www.uctc.net/research/papers/UCTC-FR-2014-08.pdf
- Biz Carson, “Uber is quietly testing flat fares that make it almost as cheap as a bus”, Business Insider UK, Aug 24, http://uk.businessinsider.com/uber-is-quietly-testing-flat-pricing-2016-8?r=US&IR=T