Analyst: Tesla’s Ride-Sharing App Could Beat Uber and Lyft

Elon Musk promised robotaxis, but there’s potential for something less futuristic

Elon Musk announcing the Tesla ride-sharing app at Autonomy Day 2019
Would you prefer Tesla ride-sharing over Uber and Lyft?
Screenshot via Tesla on YouTube
By Alex Lauer / July 30, 2020 8:00 am

“From our standpoint, if you fast-forward a year … maybe a year and three months, but next year for sure, we will have over a million robotaxis on the road,” Elon Musk said during Tesla’s Autonomy Day event on April 22, 2019. We are now one year, three months and eight days from that prediction — and no robotaxis.

That’s not a surprise, as the self-driving technology needed to power a robotaxi fleet hasn’t been unveiled, and because fallout from the coronavirus means many companies are just trying to stay profitable. But in terms of the latter point, Tasha Keeney, an analyst at asset manager ARK Invest, predicts that the electric-vehicle company could add another revenue stream while launching a smaller stakes version of robotaxis: ride-sharing. 

“… ARK believes that Tesla has strategic and tactical reasons to launch a ride-hailing service with human drivers before its robotaxi network launches next year,” ARK Invest wrote on its website. “With a more competitive cost structure than Uber or Lyft, Tesla could enjoy a recurring revenue business model with software-like margins well above its current EV margin structure.”

Electrek reported on ARK’s findings, adding that Musk has also stated he is “open to releasing the app, which he has called the ‘Tesla Network,’ ahead of achieving full autonomy.” In essence, that would mean users could simply book a ride like they would in an Uber or a Lyft, but the vehicle would be a Tesla. In the future, the plan is for users to be able to book rides in driverless Tesla vehicles, whether they’re part of the company’s own fleet or from owners who opt in to the network (and then make a little money on the side).

“While ARK still believes that Tesla will be the market leader in autonomous driving, certainly in the US, if it were to launch a human-driven ride-hailing network, the bridge to autonomous would increase its margins and lower its risks considerably,” ARK added in its post. 

With basically everyone besides Tesla is not predicting autonomous vehicles to be a reality any time soon, this seems a likely move for Musk’s EV business. (That is, whenever people actually start using ride-sharing apps again.) As he said during Autonomy Day in 2019: “The only criticism, and it’s a fair one, is sometimes I’m not on time.”

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