Ride-hailing rental startup Splend to transition Australian car fleet to electric

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Ride-hailing rental startup Splend to transition Australian car fleet to electric

March 30, 2021 Syndicated 0

Australia may take another small step in the switch to electric cars if an ambitious $40m plan by the ride-hailing rental startup Splend to transition its fleet takes off.

The company has said it will swap its petrol-driven cars in the UK for 1,000 electric vehicles by the end of the year, with half the 1,500 vehicles in Australia to follow by the end of 2022.

Its founder and chief executive, Chris King, said the company had taken possession of the first Hyundai Ioniq EVs in London last week.

Last year the UK government announced it would bring forward its deadline to end the sale of fossil-fuelled vehicles to 2030.

But in Australia the federal government’s long-awaited electric vehicle strategy, released in February, was panned by industry as a “do nothing” document, and the Victorian government is forging ahead with new taxes for EV owners.

King said the contrast in their approach and the respective level of petrol prices had dictated the company’s strategy.

“I’d say the UK is a few years ahead of Australia from a government perspective,” he said.

“Fundamentally, our position is the economics are going to drive EV adoption. The price of fuel in the UK is, in Australian terms, over $2.50 a litre. It’s basically double the price of fuel in Australia right now.

“What we’re seeing in the UK is that drivers are saving money by going electric. It’s more cost-effective for us to provide an EV vehicle and more cost-effective for the driver. We’re starting to see that come into Australia now too, and one of the biggest drivers is that the cost of EVs is coming down. A lot of that is driven by the decrease in the price of batteries and the price of battery packs.”

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The company offers training, data analytics and car rentals for ride-hailing drivers on either a rent-to-buy or for-lease basis.

King said he was in talks with car manufacturers about how to speed up the transition to electric in Australia but his company would not offer the cars to ride-hailing drivers unless the cost was at parity with internal combustion vehicles. They are now leased for about $300 a week, including the cost of a ride-hailing licence, insurance, registration and repairs.

“With EVs the capital cost is more expensive, the operating costs are less expensive and the fuel costs are significantly less expensive,” King said. “The vehicles that do the most kilometres in Australia are the ones that really should be going electric first.

“Rideshare drivers do 50,000, 60,000 kilometres a year. From that perspective, that’s where the focus needs to be. Start at the top, because at that point the drivers can save money and we also get the environmental benefit.”

According to a report commissioned by Uber there are about 60,000 ride-hailing drivers operating in Australia, though it can be difficult to get solid numbers as many will run more than one app at a time.

As the platforms set fares, consumers will not notice much difference in the price of a trip in an electric vehicle.

But the growing numbers of electric vehicles on Australia roads will cause headaches for governments and utility companies which have not planned for the change.

In Tasmania, where governments and private companies have been buying EVs in bulk, TasNetworks has announced a pilot program to better understand the effect on the grid.

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Cheryl Loone, a consultant in transport decarbonisation and the former head of electric vehicle strategy development at TasNetworks, said this was a critical step in preparing for change.

“Governments and utility providers will have to think about it at some point, it’s just a question of how prepared they are,” Loone said. “It’s important to think about because we want to understand how networks, customers and aggregators might all work to ensure no one is disadvantaged, and so we can optimise the system the best way we can.

Suddenly introducing large concentrations of EVs would quickly reveal the impact on the electricity grid, she said, and “we don’t really know what happens”.

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