One of the most remarkable and unanticipated benefits of the cloud revolution has been the emergence and rapid growth of the so-called gig economy. Ubiquitous personal geo-location, itself an unheralded revolution, combined with a cloud-centric software “platform” that connects buyers and sellers, has spawned one of society’s most dynamic, free-market employment systems. Hundreds of digital platforms—from Uber and DoorDash to TaskRabbit and Rover—now serve as the marketplace for all manner of trades in goods and services that are, in nearly all cases, facilitated by gig workers. The freelance marketplace already generates more than $200 billion annually. Pew Research found that roughly one in six adults (heavily skewing to young adults), and one in four lower-income Americans, do gig work, for which many say that the income is “important or essential.”
The twenty-first-century gig economy relies heavily on a twentieth-century technology: the car. According to the National Bureau of Economic Research, 90 percent of gig workers are employed in transportation—a trade that, of course, primarily requires a car. The widespread availability of reliable, gas-powered vehicles, combined with telecommuting and “hybrid” work, has also contributed to a rapid rise in super-commuters: people who live 50 miles or more from work. A recent Stanford study of the nation’s ten largest cities found a 32 percent jump in people commuting over 75 miles, and an 18 percent jump in those commuting 50 to 74 miles, over the past four years. While the pandemic and digital work environments played a part in super-commuting’s rise, that trend was well underway before the lockdowns. Cars have made otherwise-impractical treks possible for a growing number of workers.
It’s impossible to ignore the reality that cars are more, not less, popular in our modern culture. But the needs and dreams of gig workers and young Americans in general are on a collision course with the goals of the environmental movement, which aims to supplant traditional gas cars with electric vehicles (EVs).
On June 7, the U.S. Department of Transportation issued onerous fuel-economy standards that will force automakers to increase EV production. The new rules require manufacturers to ensure that their fleets, on average, achieve 65 miles per gallon by 2031. According to the New York Times, the new guidance is intended “to transform the American auto market into one that is dominated by electric vehicles.”
The DOT rules come on the heels of other regulations and statewide efforts to ban gas-powered cars. In April, for example, the EPA issued rules regulating tailpipe emissions, which, the Times said, were similarly “designed to ensure that the majority of new passenger cars and light trucks sold in the United States are all-electric or hybrids by 2032.” Likewise, a least a dozen states have passed laws to phase out the sale of new cars with internal combustion engines; the mandates will take effect by 2035 in eight of these states, according to Money.com.
Unfortunately for regulators and activists, 98 percent of all cars on the roads today have engines. And despite the hype and subsidies directed at EVs, gas-powered vehicles still account for 97 percent of all annual car purchases. While EVs’ “rapid” rise to a 7 percent share of new car sales has garnered much publicity, the real-world marketplace includes used vehicles that constitute nearly three-fourths of all cars purchased annually. Price matters for most car buyers, and using figures from January 2024, the average used-car price is about $20,000 lower than that of the average new car—and about $28,000 lower than that of the average new EV.
Given the steep price and apparent unpopularity of EVs, policies disfavoring traditional vehicles will create a massive shortage of affordable new gas-powered cars. That will push more buyers into the preowned market, sending used-car prices skyward.
Advocates claim that EVs will soon be as cheap as conventional cars, but supply-chain realities render that wishful thinking. The minerals used to make EV batteries and power systems are far less common than the materials needed to fabricate a conventional car. Indeed, input materials account for more than half the overall cost of an EV’s massive, half-ton battery. If electric-vehicle production rises to the level that environmentalists hope, demand for the needed metals (notably copper) will require hundreds of new mines and refineries, which no country is planning at such scale.
As for the trope that EVs are cheaper to operate, experience reveals otherwise. Earlier this year, for example, Hertz sold off much of its recently purchased EV fleet after discovering those vehicles’ maintenance and operational costs. Survey data reveals individual owners face similar problems. In 2023, Consumer Reports found that electric vehicles were associated with 79 percent more problems than were conventional vehicles. These vehicles also pose higher personal costs in the form of far longer fueling times—critically important to middle-class and lower-income drivers but less relevant for wealthy, multicar households, where the EV is an option, not a necessity. Advocates have also ignored the multitrillion-dollar infrastructure costs needed to make on-road EV fueling possible.
While one might assume that EVs’ operational and reliability features will improve and that prices will moderate over time, such progress comes only with the maturation of the associated industries, which can take many years, even decades. And with 2032 mandates looming, there is less time to achieve such progress than many imagine. The roughly four-year design and retooling cycle times for auto factories means that the type of cars available by the time the bans take effect will be based on decisions made during the next U.S. president’s term.
Progressive policymakers are pursuing pro-EV mandates, despite these headwinds, because they believe that replacing gas-powered cars will radically reduce global carbon dioxide emissions. But the notion that EVs are “zero-emissions” is untrue, even fatuous. Set aside the obvious fact that hydrocarbons, which necessarily emit carbon dioxide when burned, are essential for electricity production on grids nearly everywhere and will be for decades. The “hidden elephant” for emissions comes from the massive upstream use of hydrocarbons to mine and produce the materials needed to build EVs in the first place. Those emissions, even if happening elsewhere, can be significant enough to nullify many of the downstream reductions from avoiding conventional-car use. More importantly, any gains made from America’s adopting EVs will be wiped out by continually rising and far greater emissions from economic expansion in China, India, Indonesia, and Africa.
It’s no coincidence that the benefits of the still-expanding digital economy are colliding with the energy realities of the old economy. Ironically, the energy-hungry cloud is enabling a booming gig economy, which in turn fuels demand for the old economy’s favorite mobility technology—a low-cost, high-convenience car with a high-performance internal combustion engine. For years, Silicon Valley investors have been touting a tech-driven “mobility revolution.” Well, we’ve got one.
The name of the person who first used the term “gig” for cloud-and-car-enabled work is lost to history. The slang term itself traces its origins to jazz musicians from the Roaring Twenties, a century ago. Whether our 2020s will roar, too, depends on whether we have enough cheap old-economy grid energy to power the cloud—and enough old-economy automobiles to propel an even bigger gig economy.
Photo by Jakub Porzycki/NurPhoto via Getty Images