The explosive growth of ridesharing companies has left states facing a potential, albeit unintended, increase in greenhouse gas emissions (for example, carbon dioxide generated by fuel combustion). As a result, the California Air Resources Board (CARB) is developing the Clean Miles Standard, which aims to reduce greenhouse gas emissions from ridesharing companies.

Background

California was the first state to regulate the greenhouse gases (GHG) produced as a result of the increasing popularity of ridesharing vehicles. In 2018, then Governor Brown signed into law SB 1014 – the Clean Miles Standard and Incentive Program – a bill requiring ridesharing companies, aka transportation network companies (TNCs), to account for, and reduce, the GHG from their vehicle operations. SB 1014 requires state regulators to quantify emissions from ridesharing vehicles and to set emission targets for TNCs, while requiring companies to develop plans to reduce those emissions.

SB 1014 is designed to support the GHG emissions targets set forth in SB 32 – the California Global Warming Solutions Act as amended in 2016 – which requires California to reduce GHG emissions by 2030 to 40 percent below the state’s 1990 emission levels.

SB 1014 requires the California Public Utilities Commission (which regulates TNCs), in consultation with CARB and California Energy Commission, to establish the California Clean Miles Standard (CMS) to increase the use of zero-emission vehicles in California by ridesharing companies.

  1. As part of SB 1014, CARB was required to establish by January 1, 2020, a GHG emission baseline for TNCs on a per-passenger-mile basis. CARB staff utilized trip level data provided by 14 TNC companies to establish a 2018 base year GHG emissions inventory for TNCs.
  2. By 2021, CARB must implement the CMS, which adopts targets and annual goals to reduce TNC vehicles’ GHG emissions below the baseline by 2023.

Next steps

As a part of CARB’s efforts to develop requirements under the CMS, CARB is developing a business-as-usual inventory projecting GHG emissions per-passenger-mile from the overall California TNC fleet for future years. This emissions inventory will allow CARB staff to better understand the efficiency of ridesharing transportation in California and assess its impact on regional and statewide GHG emissions. This will also provide a reference point to establish future emission targets, track progress toward goals for emission reduction from TNCs, and facilitate decision-making on future policies.

Workshops will be held throughout the development of the CMS to facilitate relevant discussions with stakeholders and gather input leading to the estimated GHG reductions per-passenger-mile target scenarios for the CMS. The CMS was expected to go to CARB in December 2020 (prior to the COVID-19 outbreak). While some delays may now be expected, this remains a high priority for the state, which warrants consideration not only for TNCs but also for employers who may be affected by or may utilize TNCs.

For more information

If you have questions or would like additional information on the material covered in this alert, please contact one of the authors (listed above) or the Reed Smith lawyer with whom you regularly work with.