What would be the return on investment of transitioning a taxi company’s fleet to electric vehicles?
We built a Bayesian model to calculate the return on investment when switching to electric vehicles. The model can be configured with several input parameters, including the type of vehicle to be tested, electricity and gasoline prices, and roadside charging/battery switching infrastructure assumptions.
We evaluated our model using location data collected from over 500 Yellow Cab San Francisco (YCSF) taxis. Using prices at the time of the study, 2014, we found that transitioning YCSF’s fleet to battery electric vehicles and hybrid vehicles was indeed profitable. Moreover, given that gasoline prices in San Francisco were only 5.4% higher than the rest of the US, but electricity prices were 75% higher, taxi companies with similar mobility patterns in other cities were likely to profit more than YCSF. Generally, when gas prices rise above a certain level, EVs will give a better return on investment.
We’d like to note that at the time of this study, we made the assumption that there would be battery swapping stations set up around San Francisco to allow EVs to recharge immediately (see: Better Place). As part of our study, we determined that the optimal place to put these swapping stations would be at the airport, where longer taxi trips would likely drain the battery of an EV. Unfortunately, the infrastructure for these stations was never realized.
Access the paper here
J20. T Carpenter*, AR Curtis*, S Keshav. (2014). The return on investment for taxi companies transitioning to electric vehicles. Transportation. 41(4)