Uber Mexico Relies on Carbon Offsets to Neutralize Emissions
Earlier this year, international ride-share app Uber committed itself to reaching net-zero carbon emissions by 2040 globally. To reach this goal, the company has had to back down from a previous commitment to stay away from carbon offsets.
Uber had previously stated it would not make use of “carbon offsets” or investing in environmental restoration projects to counteract carbon emissions. The original report referred to carbon offsets as having many weaknesses and ultimately consisting of paying someone else to take environmentally conscious actions while continuing to pollute. However, the app offers Mexican riders a “Uber Planet” option, which charges an extra MX$0.37 (US$0.018) that go towards purchasing carbon offset credits and creating a wind farm in Oaxaca.
Originally, Uber’s commitment consisted of a US$800 million investment to facilitate the transition to a fully electric-vehicle fleet by 2030 as one of four actions to reduce carbon emissions. Another strategy known as “Uber Green,” would have allowed users to request an environmentally friendly car for an extra charge of US$1, which meant to help drivers switch to hybrid vehicles. But in Latin America, the app may not be able to reach its goal as originally intended.
While the company has kept its goal to achieve carbon neutrality in the next 20 years, implementation differs by region. Uber has since recognized the challenges of achieving a full transition towards electric vehicles by drivers in Latin American countries, such as Mexico, Colombia, Ecuador and Costa Rica, where the app offers riders the “Uber Planet” option.
Mexico’s electric vehicle market is well behind global progress. Currently, the country’s car market is made up of only 6.4 percent electric and hybrid vehicles while worldwide, these vehicles make up 15 percent of all sales. The market share is only expected to increase to 12 percent in Mexico while it will expand to 50.5 percent internationally. Because of this, the company is investing in carbon offset credits but the effectiveness of the credits bought through Uber Planet has been called into question.
Although the credits bought were approved by organizations such as the Climate Action Reserve (CAR), the true effectiveness of the contributions made to the Oaxaca IV wind farm project are unclear. Offset specialists reviewing the wind farm project have questioned if the credits truly financed the project, as they claim it would have been able to be realized without Uber’s credits, which account for 16 percent of Uber Planet’s carbon credit purchases in Mexico.
The ride-share app must also compete with environmentally conscious competitors such as the entirely electric Beat Tesla and the Chinese ride share-app Didi, which claims to have over 1,600 hybrid or electric vehicles in Mexico.
David Minguez, Spokesperson, Uber Mexico, estimates that through additional incentives such as promotional prices for electric or hybrid vehicles and a MX$10,000 (US$480) bonus per 160 trips, over 600 of the 200,000 drivers Uber has in Mexico will be able to switch to an electric or hybrid vehicle by 2022. But the company’s ability to truly reach their carbon-neutral emissions goal is yet to be seen.