As PASPA repeal begins, leagues gear up for the inevitable

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After more than two decades, the Supreme Court has agreed to hear the repeal of the Professional and Amateur Sports Protection Act. PASPA, a federal law enacted in 1992 outlaws single-game sports wagering outside of Nevada. While opening arguments will commence in early December, a decision will likely not be reached until early 2018. Still, this is the furthest that the argument for a modernized and regulated sports betting market has reached. A decision in favor of repealing the law, which the state of New Jersey has claimed as unconstitutional can unlock a market worth several billion dollars.

While the Supreme Court gears up to hear opening arguments in this case, leagues across the world have begin to prepare for what is seen as the inevitable. Through partnerships, changes in stances, and sponsorships, leagues have been preparing for quite some time. In the two decades-plus since PASPA was first enacted, the world of sports has greatly changed.

PASPA was enacted in a way to protect the sanctity of the game. Fears of point shaving and match fixing forced the public and Congress to accept a bill that would seemingly fix such problems. However, in the years since daily fantasy leagues have taken their place in American society, sports leagues have taken sponsorships from casinos, and most importantly have led way to an offshore illegal market worth $150 billion dollars.

Take for example the über popular NCAA March Madness tournament. The annual affair draws fans from across the United States to fill out tournament brackets in which they predict who will move on. In recent years more and more fans have turned towards wagering their picks online.

The American Gaming Association estimates that roughly 40 million people fill out 70 million brackets with the average bet per bracket hanging around $29. This year the AGA estimated that Americans wagered $10.4 billion dollars on March Madness. Of the $10.4 billion wagered, only 3 percent or roughly $295 million will have been done so legally through Nevada sportsbooks.

What’s important to note is that while the United States Supreme Court has agreed to hear the repeal of PASPA, it does not come on the heels of the issue of the unfounded fears against match fixing or the billions of dollars being pumped into organized crime, but rather if the law violated the 10th amendment and the sovereignty of states when it was first ushered in. Still, the result of this decision can lead way to ending such widespread problems.

SportRadar a company that deals with data is partnered with three of the four biggest leagues in the United States. The company which provides real-time statistics for the NFL, NBA, and NHL. In addition to providing statistics used by broadcasters and bookies worldwide, SportRadar also monitors and reports on unusual betting trends. The company is also the parent company of BetRadar, a major figure in the gambling industry.

Likewise, the MLB which represents the fourth biggest league in the United States has a partnership with Genius Sports which acts in the same manner as SportRadar. Its executives met with sportsbook operators in September to gain a better understanding of how the industry operates.

These partnerships with data companies provide a stark shift in stance compared to just one decade earlier when representatives filed a letter dismissing the idea of monitoring books and the data that makes them up.

Outside of partnering with outside agencies, the NFL and NHL have both elected to move and create franchises in Las Vegas respectively. The Oakland Raiders of the NFL are set to arrive in 2019, while the Las Vegas Golden Knights have opened play this past week.

Attendees of Golden Knights home games will be able to readily bet within the confines of the T-Mobile Arena. The NHL had the opportunity to file a prohibition preventing sports betting from occurring as the game happens, however, elected not to.

The NFL in recent years has held games in London, England where sports betting is regulated and legal. Outside of moving the Raiders to Las Vegas, the NFL has also eyed creating a franchise in the country. The ability to bet in-game without the result being compromised is a look at the potential for such a feature in the United States.

NBA commissioner Adam Silver wrote in 2014 in the New York Times, “Times have changed since PASPA was enacted.” “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”

Should PASPA be repealed, over a dozen states have already filed legislation this year that would permit wagering on sports in some way. The AGA estimates that a legal sports betting market would provide over 150,000 in jobs.

Steve Doty, Director of Media Relations, says that the AGA is committed to turning over PASPA and leading the conversation. “AGA looks forward to leading the conversation in states across the country to educate local lawmakers on sports betting.”

Company Eilers & Krejcik Gaming has taken a conservative approach to estimating the potential for a legal and regulated betting environment. They estimate in a base case that by 2023, if 32 states were to legalize sports betting in some form the market will be worth approximately $6.03 billion dollars in annual revenue.

If every state were to legalize gambling, including online wagering, the number expands to $16 billion dollars which comes from $245 billion taken in.

All of this comes on the heels of a Washington Post poll published in September which sees more than half of Americans supporting a legal and regulative sports betting environment. 55-percent approve of such an environment which serves as a drastic shift from nearly 25 years ago when PASPA was first enacted and 56-percent of Americans disproved of legalized sports gambling.

 

Poll: For first time, majority of Americans approve of legalizing sports betting – The Washington Post

Recent U.S. gambling legalization: A case study of lotteries – ScienceDirect

U.S. Sports Betting: A Sector On The Cusp Of Major Change | GamblingCompliance

Gambling – Where does sports betting legalization in the U.S. stand right now?

Sports Betting Ban Has ‘Perverse Effect,’ Says Casino Group – Poker News

NFL’s presence in UK shows how gambling can be done

March Madness Betting to Top $10 Billion | AGA

 

Dreamers Manifesting the American Dream

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In 2012, former President Barack Obama created DACA, the Deferred Action for Child Arrivals, through an executive order—this program “has allowed hundreds of thousands of young people who were brought to the United States illegally as children to remain in this country,” said NBC News. In fact, The Cato Institute stated that these DACA participants, called Dreamers, have the opportunity to “receive temporary protection from deportation, work permits, and an incentive to invest in their own human capital” as long as they “have lived in the United States for five years or longer and do not have a criminal record.” In other words, Dreamers have been able to “achieve milestones typically associated with the American dream, such as pursuing higher education, earning better wages to support their families, and buying homes,” as explicated by American Progress. On September 5th, 2017, Attorney General Jeff Sessions announced President Trump’s decision to terminate DACA which would essentially kick out about 800,000 Dreamers out of the country. This is not only inhumane, but will have an inevitable impact on the workforce in America—although both sides of the issue will be explored, DACA is more of a boost to the economy than a deterrent.

DACA recipients “are relatively well-educated, meaning they have the capacity to make the economy that much more productive,” according to NPR. The average age of DACA recipients is 22 and they “earn about $17 an hour on average, ‘tend to be younger, better educated, and more highly paid than the typical immigrant,’” said Time. As a 21-year-old at attending a reputable college like the University of Southern California, I have never had a job earning the wage of the average Dreamer—and have actively looked for one—which demonstrates their success and path to fulfillment of the American Dream. In exact numbers, the U.S. Citizenship and Immigration Services declared 787,580 people as DACA recipients through March 2017, and 87% of them are employed as conducted in an October 2016 survey by the Center for American Progress. Also to note, 6% of Dreamers “even starts businesses of their own, thus creating more jobs for others,” instead of taking them away, according to New Republic. The Cato Institute even compares the dreamers to recipients of H-1B visas, “skilled workers who are invited into the country to fulfill specific economic needs.” Most of the H-1B visa participants, like Dreamers, tend to be younger and more educated, thus, they have a closer resemblance than Dreamers do to other unauthorized immigrants. To note, it is crucial to separate DACA recipients in a separate category form other unauthorized immigrants.

According to a 2016 study in the Journal of Public Economics by Nolan G. Pope, “DACA moved between 50,000 and 75,000 immigrants into employment from either outside the formal labor force or unemployment, and increased the average income of immigrants in the bottom of the income distribution.” This is a step up for the economy because a higher income means more money to spend and being able to pay their taxes, thus, further stimulating the economy. The “extra money they made let to financial stability and a big increase in car and home purchases,” according to New Republic. On top of that, a 2014 survey by the American Immigration Council found that “59 percent of DACA recipients reported getting their first job, 45 percent received a pay increase, 49 percent opened their first bank account, and 33 percent got their first credit card due to their participating in DACA”—all factors that, again, boost the economy.

On the other hand, the White House’s main argument is that Dreamers are taking jobs away from Americans. At the press briefing on the day of Trump’s announcement, White House Press secretary Sarah Huckabee Sanders said, “I think that it’s a known fact that there are over 4 million unemployed Americans in the same age group as those that are DACA recipients” (qtd. in The Hill). Although it seems logical to believe that more jobs would open up for Americans if 800,000 DACA recipients no longer existed, but “[there] is no evidence of that,” according to chief economist at Moody’s Analytics Mark Zandi. First of all, the Bureau of Labor Statistics stated that the unemployment rate is 4.2 percent as of September 2017 which is the lowest it has ever been—to put into perspective, the last time our annual unemployment rate has been in the fourth percentile was a decade ago in 2007 at 4.6. This means that our job market is currently doing very well. President and CEO of economic research firm Perryman Group, Ray Perryman, adds, “I think the primary thing that would argue against [the White House’s claim] at this point is, we are at full employment with more job openings than at any point in history” (qtd. in NPR).

If the program continues as it has been, it could end up covering 1.3 million people, which means there is that much more potential for a more effective and productive workforce. But a study by the Center for American Progress shows that an average of 30,000 DACA beneficiaries will be out of work each month which becomes added pressure for employers to fill those spots in a short amount of time to maintain an efficient workplace—if the employers fail to do so, it could potentially result in the closing of their business, thus, Americans losing their jobs as well. And among the 800,000 Dreamers are those with valuable jobs such as in the health-care system. The Association of American Medical Colleges “projects the physician shortage could reach 105,000 by 2030,” as well as “lose nurses, nurse practitioners, pharmacists, medical researchers and slews of other professional and nonprofessional healthcare workers” by kicking out current medical students with DACA status. And not only will the shortage of health workers negatively impact our country, but the AAMC adds that “when physicians train in teams that are culturally diverse,” such as with Dreamers, “it improves outcomes because everyone is sensitized to the needs and customs of patients from immigrant and minority backgrounds.” So we aren’t just losing Dreamers, we are losing compassionate physicians—from diverse backgrounds and those who speak other languages—who help make the entire health-care system a more culturally adept place.

In addition to the fact that Dreamers aren’t taking away jobs from Americans, not even the “lower-educated or low-wage immigrants aren’t stealing our jobs,” according to New Republic. These immigrants compete on their own in an entirely different and more low-skilled workforce than those who are American born citizens, even natives without high school diplomas. While “[less-educated] native workers are over-represented in occupations that interact with the public and coworkers and that have supervising responsibilities, licensing requirements, and demanding mechanical and computer operations,” immigrants dominate jobs with manual or bilingual skills, according to Urban. Urban adds that the two groups “even could be complementing each other.” On top of that, a study by the National Academies of Sciences, Engineering and Medicine, research done by 14 leading economics and other scholars, states that “We found little to no negative effects on overall wages and employment of native-born workers in the longer term” (qtd. in the New York Times). The White House’s statements were simply false.

Not only are Dreamers efficient workers, but the removal of this program would be a huge hit to the economy. In fact, “removing the DACA immigrants from the economy would cost the U.S. $215 billion in lost economic output over 10 years, plus another $60 billion in lost taxes” and “[deporting them would cost another $7.5 billion, and when that’s added up the cost of ending the DACA program comes to a total of minus $283 billion,” according to the Cato Institute. Jeff Sessions argued that “expelling DACA permit-holders—again, many of whom are children—from the country is vital to protecting Americans from ‘crime, violence, and terrorism,’ alluding to the marauding bands of criminal undocumented immigrants,” said GQ. This is also not true because to be eligible for DACA, one must pass a background check as well as a screening process for felonies and misdemeanors. So we aren’t making America any safer by rescinding DACA—we are only increasing government spending and wasting taxpayer dollars on unnecessary deportation of those who have not only done no wrong, but are helping grow our economy. These “high-skilled immigrants add to the nation’s stock of human capital, boosting productivity and growth,” stated U.S. News.

Dreamers know of no other home besides America. And simply put, these Dreamers “never knowingly broke any law and have been productive and peaceful members of society since their arrival,” according to the Cato Institute. And with backed-up evidence that Dreamers are, in fact, not taking jobs away from natives—which is the White House’s main argument—and since they pose as no threat to the country—their other argument of Dreamers being potential criminals—, what are we waiting for? Currently, DACA is still due to expire in six months, although current permits will be honored until expiration.

Works Cited

Albright, Ike Brannon and Logan. “The Economic and Fiscal Impact of Repealing DACA.” Cato Institute. Cato Institute, 18 Jan. 2017. Web.

Bryant, Meg. “Ending DACA Would Damage the Provider Workforce.” Healthcare Dive. Industry Dive, 05 Oct. 2017. Web.

“Bureau of Labor Statistics Data.” U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 10 Oct. 2017. Web.

Covert, Bryce. “No, DACA Immigrants Aren’t Stealing American Jobs.” New Republic. New Republic, 07 Sept. 2017. Web.

Delk, Josh. “White House Claims DACA Recipients Take Jobs Away from Americans.” TheHill. Capitol Hill Publishing Corp., 05 Sept. 2017. Web.

Enchautegui, Maria E. “Immigrant and Native Workers Compete for Different Low-skilled Jobs.” Urban Institute. Urban Institute, 25 Mar. 2016. Web.

Horowitz, Julia. “Trump’s DACA Decision Could Cost Thousands of Jobs, Study Says.” CNNMoney. Cable News Network, 30 Aug. 2017. Web.

Kurtzleben, Danielle. “FACT CHECK: Are DACA Recipients Stealing Jobs Away From Other Americans?” NPR. NPR, 06 Sept. 2017. Web.

“National Unemployment Rate at 4.2 Percent through September 2017.” National Conference of State Legislatures. National Conference of State Legislatures, 6 Oct. 2017. Web.

Nicole Prchal Svajlenka, Tom Jawetz, and Angie Bautista-Chavez. “A New Threat to DACA Could Cost States Billions of Dollars.” Center for American Progress. Center for American Progress, 21 July 2017. Web.

Preston, Julia. “Immigrants Aren’t Taking Americans’ Jobs, New Study Finds.” The New York Times. The New York Times, 21 Sept. 2016. Web.

Salisbury, Ian. “DACA: Economic Cost of Deporting Undocumented Immigrants | Money.” Time. Time, 7 Sept. 2017. Web.

Stone, Chad. “The High Costs of Ending DACA.” U.S. News. U.S. News & World Report L.P., 29 Sept. 2017. Web.

Willis, Jay. “Jeff Sessions’ Rationale for Ending DACA Is Outrageously Disingenous.” GQ. GQ, 05 Sept. 2017. Web.

 

Proposed immigration reform to grow U.S. economy, or not?

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On February 13, U.S. Senator for Arkansas, Tom Cotton, introduced the RAISE (Reforming American Immigration for Strong Employment) Act to the Senate. The RAISE Act seeks to amend the Immigration and Nationality Act to create a merit-based immigration system and replace the diversity immigrant visa program. The bill’s overall aim is to protect American taxpayer workers, taxpayers, and the economy.

The RAISE Act reduces overall immigration numbers to limit low-skilled and unskilled labor entering the U.S. Immigration reform is important now more than ever; America’s economy and future is dependent on it. The main cause for concern is the aging population. The U.S. population is aging rapidly as baby boomers enter old age and retirement.

The Population Reference Bureau reported the number of Americans aged 65 years and older is projected to more than double from 46 million today, to over 98 million by 2060. The 65 years and older group share of the total population will rise to nearly 24 percent from 15 percent.

An aging population has a direct impact on the labor force. This will result in a dependence on immigrants to replace current workers and fill new jobs. However, a surge in unskilled immigration over the past few decades has been blamed for depressing wages, according to President Donald Trump.

Since 1979, Americans with a high school diploma or less have seen their hourly wage decline, according to The White House. American workers without a high school diploma have seen their real hourly wages fall by 17 percent, in a press release quoting President Trump.

Twenty-nine percent of adult immigrants in the U.S. don’t hold a high school diploma, in contrast to seven percent native-born. However, native- and foreign-born adults hold bachelor’s degrees at similar rates, 32 percent for those born in the U.S. and 30 percent for those born outside the U.S.

Key sectors with low-skilled workers confirm the variance in education levels between immigrants and U.S. citizens. This is highly relevant to the agriculture and accommodation sectors. The majority of immigrant workers who work in the agriculture sector are low-skilled, compared to 29 percent of native workers. In the accommodation sector, more than half of foreign-born workers lack a high school diploma, compared to 25 percent of native workers.

On top of this, more than 50 percent of all immigrant households receive welfare benefits, compared to over 30 percent of native households, according to a 2015 Center for Immigration Studies Report.

Dean and Professor of Public Interest Law and Chicano/o Studies at the University of California, Davis, Kevin Johnson argues the reason there is a high number of foreign workers in low- to medium-skilled jobs sectors like agriculture, construction and services was not due to there being too many immigrants, but due to the work conditions.

“Low-skilled jobs are low status, pay low wages, and are physically challenging,” Johnson said. “Employers often say that they cannot get U.S. citizens to fill these kinds of jobs.”

The issue seen with the U.S.’s current immigration system is that it doesn’t prioritize the most highly skilled immigrants. On average, one million immigrants are accepted into the U.S. for legal permanent residency every year. On average, one out of 15 immigrants come to the U.S. with a high skillset.

Due to low-skilled workers taking the majority of non-citizen visas, the U.S. could be losing out on foreign talent. With the proposed merit-based immigration system, the RAISE Act will prioritize immigrants based purely on the skills and knowledge they bring to the U.S. The skills-based system rewards applicants points based on individual merit. The system rewards points in areas such as higher education, English language ability, high paying jobs, and past achievements. This process is to ensure immigrants contribute positively to the country and the economy.

The RAISE Act also prioritizes immediate family members of foreign workers to live in the U.S., and ends preferences for extended family members and adult children. The new reform also limits permanent residency of refugees to 50,000 a year, which is in line with the 13-year average.

Senator Cotton ultimately wants the RAISE Act to: 1. Help American workers receive a pay rise and achieve a higher standard of living, and 2. To promote economic growth and make the U.S. a more competitive country.

The proposed merit-based immigration proposal is modeled on the current Canadian and Australian systems. Both countries successfully attract highly skilled workers and see the benefits it adds to population growth, productivity and income per capita.

The various ways that migration and population growth can be linked to Canada and Australia’s productivity and income per capita growth include, supply of labor; capital, investment; government expenditure on services and taxation; competition; natural resources, land and environmental externalities; and international trade.

Immigration is the largest contributor to population growth in Canada since the early 2000s. Canada’s permanent immigration program is divided into three main streams: economic, family and humanitarian. In 2015 to 2016, Canada admitted 271,845 permanent immigrants. Of this number, the economic stream accounted for 60 percent of migrants, family made up 24 percent, and the remaining were humanitarian migrants. These proportions have remained fairly stable over the past 15 years.

In Australia, there are two pathways for skilled migration. The first, general skilled migration, requires applicants’ occupations to appear on a skilled occupations list. Most of these occupations are in professional areas such as medicine, engineering, or trades. The list is updated regularly based on an assessment of Australia’s economic needs at the time. The second pathway is for skilled migrants with an employer sponsor. This pathway is open to migrants with a wider range of skills. Employers must demonstrate they have a skilled position available and there are no Australians willing or able to take up the position.

In 2015 to 2016, Australia accepted 189,770 permanent migrants through its skilled and family immigration streams, and settled 18,000 refugees and humanitarian migrants. Sixty-seven percent of migrants came through the skilled stream, and 30.8 percent through the family stream. These numbers add almost one percent to the Australian population each year, a much larger proportion than the U.S. admits through its migration program.

Twenty years ago, more migrants came through the family stream than the employer stream. The change in numbers is a direct result of government policy prioritizing skilled migration because of its value to the economy.

A merit-based immigration system will transform the U.S. immigration system from primarily family-based to employment-based. Under the U.S.’s current system, most employment-based immigrants are highly skilled, but make up only 14 percent of those who receive green cards. Under the RAISE Act, employment-based immigrants would make up the majority of those who receive green cards.

Deputy Dean and Director of the Public Law and Policy Research Unit at Adelaide Law School at the University of Adelaide in Australia, Alexander Reilly, said increasing skilled migration at the expense of family migration can impact on the desires for family reunion of existing U.S. citizens.

“In Australia, parent migration is very difficult,” Reilly said. “It may be that partner and child migration, which is currently considered a matter of right here, will have quotas or waiting lists imposed.”

A problem Reilly sees in Australia with independent skilled migration is that migrants find it hard to get jobs in their area of expertise and end up unemployed.

“Skilled migrants’ success is better if they have family support, so merit-based migration definitely needs a strong family component.”

In the proposed points system for the U.S., applicants would earn points for meeting criteria to do with age (preference for persons between ages 26 and 30) and having a degree. Extra points would be awarded for degrees earned in the U.S. and in a STEM (science, technology, engineering and mathematics) field. Nobel Prize winners, professional athletes and English language speakers would also receive extra points.

Johnson said that while the Australia and Canada case studies were worth reviewing, the U.S. has its own history and political, social and economic forces that contribute to immigration pressures and flows that may not exist in Canada or Australia.

“Australia and Canada don’t operate in the same context as the U.S., so those main factors must be considered in any reform of U.S. immigration law,” Johnson said.

Johnson believes a merit-based immigration system that halves the number of legal immigrants entering the country will unintentionally increase the number of undocumented immigrants.

“The goal of the U.S. government is to reduce legal immigration from one million a year to 500,000 a year, and this reduction will be seen in family immigrant visas,” Johnson said. “With the current limits on legal immigration, this has bought in roughly 11 million undocumented immigrants to the U.S.”

“Making legal immigration even more restrictive will increase the likelihood that those who want to immigrate lawfully will resort to doing so illegally.”

When asked if the RAISE Act will reduce poverty, increase wages and save taxpayers millions of dollars, as stated by President Trump, Johnson replied, “There is no empirical evidence to support this claim.”

References

Camarota, S. A. (2015, September 10). Welfare Use by Immigrant and Native Households: An Analysis of Medicaid, Cash, Food, and Housing Programs (Report.). Center for Immigration Studies. Retrieved October 4, 2017, from Center for Immigration Studies website: https://cis.org/Report/Welfare-Use-Immigrant-and-Native-Households

Infographic: Annual average growth rate, natural increase and migratory increase per intercensal period, Canada, 1851 to 2056. (2017, March 30). Government of Canada. Retrieved October 04, 2017, from http://www.statcan.gc.ca/daily-quotidien/170208/g-a001-eng.htm

Mather, M. (2016, January). Fact Sheet: Aging in the United States. Population Reference Bureau. Retrieved October 04, 2017, from http://www.prb.org/Publications/Media-Guides/2016/aging-unitedstates-fact-sheet.aspx

Reilly, A., Paquet, M., & Johnson, K. (2017, September 17). RAISE Act: Global panel of scholars explains ‘merit-based’ immigration. The Conversation. Retrieved October 04, 2017, from http://theconversation.com/raise-act-global-panel-of-scholars-explains-merit-based-immigration-82062

Salerian, J. (2006, May 17). Economic Impacts of Migration and Population Growth (Report.). Retrieved October 4, 2017, from the Australian Government, Productivity Commission website: https://www.pc.gov.au/inquiries/completed/migration-population/report

Singer, A. (2016, August 02). Immigrant Workers in the U.S. Labor Force. The Brookings Institution. Retrieved October 04, 2017, from https://www.brookings.edu/research/immigrant-workers-in-the-u-s-labor-force/

The White House, Office of the Press Secretary. (2017, August 2). President Donald J. Trump Backs RAISE Act [Press release]. Retrieved October 4, 2017, from President Donald J. Trump Backs RAISE Act

U.S. Congress, Senate – Judiciary. (2017, February 13). Congress.gov (T. Cotton Sen., Author) [Cong. S.354 from 115th Cong., 1st sess.]. Retrieved October 4, 2017, from https://www.congress.gov/bill/115th-congress/senate-bill/354/text

Clouded business models: The complex world behind EV charging stations

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According to Google Maps, the Mobil gas station located at 8489 Beverly Blvd in West Hollywood is surrounded by charging stations for electrical vehicles. This isn’t surprising because the number of EVs in California is increasing, and this particular area is ideally located at the intersection of two main arterial roads in Los Angeles: Beverly Blvd and La Cienega Blvd. This image raises an important question: are these charging stations competing with gasoline stations?

Bhulu Ahmed, the Mobil station’s owner, said that he hasn’t seen any change in his business over the past few years. “To be honest,” he added, “I do not see many EVs around here.” He explained that he has been working in the area for almost thirty years and, although the number of EV drivers has increased, he still serves the same number of customers as usual.

He hasn’t experienced significant changes in the cost of gas, either; that day, the price of regular gas was $4.49 per gallon. Certainly, an EV driver might claim that that price is much more expensive than what he pays to recharge his car.

According to research conducted by Michigan University, based on average yearly mileage of 15,000 miles, an EV driver pays about $540 per year to charge his car, rather than the $1,400 per year paid by the driver of a gas-powered automobile. These significant savings do not factor in that many EV drivers can charge their vehicles for free.

Despite charging stations being so convenient, and sometimes even free, there is still an issue that could kill, or at least curb, the expansion of electric vehicles: the undefined business model of these charging stations. Currently, every EV charging station charges different prices, which vary depending on the type of connector, the equipment features, and the area where it is located.

It is unknown whether EV charging stations will replicate the gasoline station’s business model, or whether the electricity offered for free by many plug-ins’ owners could prevent entrepreneurs from opening stations where drivers must pay to charge their vehicles.

The business model of EV charging stations is still clouded; perhaps this is one of the reasons why, although surrounded by EV charging stations, Bhulu Ahmed has not experienced a decrease in his business yet.

 

It’s complicated

     According to PlugShare, one of the most popular apps that allows users to find and review charging stations, none of the five charging stations close to Ahmed’s Mobil station have the same connector type or charges the same price. The closest one, at the Sofitel Hotel, has two J1772 EV plugs that cost $18 to use, once under six hours of parking is purchased. Another charging station in the area, at the Elan Hotel, has a Tesla plug type and the J1772. Unlike the Sofitel, the Elan does not require parking payment but only charging payment. Nearby, there are also charging stations at Trader Joe’s; there, drivers do not pay for parking, but they have to pay a fee for the charge through Blink, a network of charging stations for EVs. Moreover, people reported on PlugShare that they had problems at this location, because drivers of gas-powered cars park in spots reserved for EVs, and because of most of the chargers were broken.

From this, it is easy to see how an EV driver might experience many kinds of payment models in just a few miles. To avoid these issues, some people purchase their own charger. Once the initial installation costs, which are decreasing thanks to government incentives, have been paid, drivers can then charge their cars whenever they want, solving both the “range-anxiety” and the payment issue.

The differences among EV charging stations are numerous: some charge by the kilowatt hour, others charge drivers per session, others require drivers to purchase a subscription, allowing them to charge their vehicles wherever they want at uniform prices, and lastly, there are free charging stations.

“The cost of the electricity is determined by the owners of the charging equipment. Some choose to charge. Some offer free charging as a customer incentive. Some fold the cost of the charge into parking or HOA fees,” stated Jennifer Allen, the supervisor of the zero-emission vehicle and infrastructure office within the California Energy Commission’s Fuels and Transportation Division. Moreover, the owners determine prices also according to the type of charger level; a level 2 usually requires between $1 and $5 per session, while the DC fast-charging plug-ins require drivers to pay higher prices for the convenience of charging their cars in a very short time.

PlugShare’s CEO, Brian Kariger, explained how payment methods work in EV charging stations: “Station owners and operators choose pricing. For example, if you own a parking lot you could choose to purchase a charger from SemaConnect, one of our partners, and once it was installed in your lot, you’d log into a website to set pricing as you see fit. Your station would then appear in PlugShare, and drivers would enter their credit card information into the app to pay and be on their way.”

Some malls, supermarkets, and stores have chosen to offer free electricity because, as Kariger said, “some businesses install charging stations to attract customers.” Sorean Kim, a woman I interviewed at The Grove, said that she was taking advantage of the free charging station while shopping: “I found free places near my work and my home and actually my commute is not so far, so I do not have to charge my car very often.”

 

Not yet defined

   Might the free charging station model endanger the emergence of other models as well as the expansion of EVs? When I asked if they see a potential long-term business model based on charging EVs with free electric power, each of my interviewees answered that actually it is very unlikely.

Jennifer Allen stated that there are even gas stations selling electricity for EV vehicles right now. Indeed, even though it seems that the free charging station model is still growing, “free stations aren’t always the best option.” Indeed, from its data analysis, PlugShare found that drivers are willing to pay for features like faster charging and for being able to plug in at convenient locations along the highway during a long-distance trip.

In the last year, there has been a huge increase in the number of electric cars registered in the United States, especially in California, where there are many new programs and government incentives to encourage drivers to convert to EVs. Lisa Chiladakis, manager at Veloz, a Sacramento-based non-profit organization dedicated to increasing awareness about EVs, told me that the California government’s goal is to have 1.5 million EV drivers by 2025.

Thanks to the increased number of EVs and charging stations, new business models are being developed, even though there are free charging stations available. They range from the home-model, the networking-model pursued by companies such as ChargePoint, Blink, SemaConnect, eVgo… and the super-fast-charging model. As Brian Kariger pointed out, “one of the effects of having all of these less expensive, and in some cases consumer-owned, distributed energy resources is that it is opening up the energy business to more open models; for example, peer-to-peer energy trading. Electric vehicles themselves are mobile energy resources, and there are already pilot programs underway in which utilities and grid operators pay EV drivers for sending energy back into the grid. So not only will EV drivers be able to get reduced rates or free electricity, they will be able to sell energy to others as well.”

Overall, it seems that electrical vehicles are slowly reshaping the gas station business model that we are used to; we do not know yet which model will be the winning one, but surely many others are yet to come as the industry continues to evolve.