Articles/megaposts by DaveT

[WarpedOne]

And currently, the odds are against Tesla being successful in the ride-sharing market against Uber or in the transporting goods market against Uber/Amazon/etc.

I am not convinced.
Uber is in the lead until they start buying their own cars. After that they must maintain them. That is one big money sink.

assumption 1: all model 3 will all required autonomous HW
assumption 2: autonomous HW will come before regulators approve its usage
assumption 3: Model 3 becomes autonomous car via OTA update
assumption 4: ICE cars with autonomous HW will not be produced in 500k pieces per year at 35k price point

1+2+3+4: Tesla has the biggest fleet of autonomous capable vehicles at their hands to play as they see fit and update as need arise + their fleet sees fastest grow rate.

As far uber has ordered 500.000 MB class S with that will offer autonomous option sometime in the future. That fleet will be as expensive to buy as 1.5 M tesla cars around 2021. Uber wil have to pay for those MB cars - an expense, Tesla will see that kind of money as revenue.

Say MB will deliver those 500k S up to 2021. Regarding the size and wait time, one summoning a Tesla will get his autonomous ride sooner than one summoning an autonomous uber car.

 

[cronosx]

I am not convinced.
Uber is in the lead until they start buying their own cars. After that they must maintain them. That is one big money sink.

Not really.. or better.. partially.
They can buy car when necessary, but they don't need to, the 2 world can cohesist

 

[bh1783]

Tesla has a global presence in being able to test out it's autopilot in China and other countries. Uber already exited China and it's unlikely that AMZN will enter China and Google withdrew years ago. There is little to no chance that google autonomous tech will be available in China considering the fact that all other things Google are banned in China.

 

[lolachampcar]

Normally I go along with Dave's analysis.....
Normally.

What we are missing here is a discussion of the fundamental change in cost structure. Tesla produces and services the vehicle with a world wide (and growing) presence. They can put a BeV at your feet for a fraction of the costs of Uber. Period. Full stop.

It does not matter if you are comparing Tesla to Uber when someone else owns the car and is doing a ride share all the way through both companies owning and operating the entire fleet, Tesla will always have the hardware (platform and autonomous driving hardware), software (updates, autonomous firmware) and cost to operate (BeV versus ICE or Hybrid) advantage.

There is not another company on the horizon that can bring the very distinct core competence advantages of BeV and Autonomy together like Tesla. Add to that the expansion of Tesla's goals to include battery manufacturing and making machines that build the machines as core competences and any possible competition is in deep yogurt. Elon is playing all in Monopoly (the game, not the SEC meaning of the word) with his technological sandbox. He is adding value leaps and bounds to his projects every time those projects can generate access to more shekels. It's a hoot to watch.

To use Dave's example, are you going to use the service that charges you $1/mile or the one that charges you 10 cents per mile? These are not accurate numbers of course but you get the picture. I'd feel sorry for Uber if their original business model had created value instead of picking (arguably very vulnerable) low hanging fruit.

As a back of the napkin calculation-
Let's call it 40 cents per mile asset cost (depreciate a model 3 over 300K miles inclusive of cost of money? $60K car times two for cost of money divided by 300K)
20 cents per mile operating (tires, charging, service, cleaning, insurance)

That totals 80 cents per mile so add a 20% return and you're up to a buck a mile. What does Uber charge?

 

[vgrinshpun]

And then there is 800 lbs gorilla in the room: ICE and autonomy do not add together organically. EVs and autonomy go hand in hand. Autonomous EVs require system designed to be optimized around charging infrastructure and on-board battery size.

No car manufacturer has anything close to what Tesla's has: system that includes EV platform, self driving technology, existing and developing charging infrastructure optimized both geographically and with the on-board battery size. Uber will have a toll order competing with Tesla shared mobility without having self driving EVs with attributes described above.

I do not think that Tesla will allow its cars to be used in Uber mobility services if it plans to offer their own mobility services. Uber will have to find EV manufacturer that at least matches Tesla on above parameters, a huge hurdle IMO.

 

[lolachampcar]

There is nothing to say Uber can not participate for the 20% margin using their then existing customer base. I think Tesla will take customers that pull ICE off the street anywhere they can get them. Given Tesla's stated mission, I would not think they would discriminate against Uber.

 

[Sparky]

These are good talking points DaveT. But it's very early still.
It seems to me Uber's moat is shallow. I'm a long time Uber user, including the food delivery services.
For ride-sharing, I've been switching to Lyft lately. I always chat with my Uber/Lyft driver and ask how long they've been doing it and why they may prefer driving for one over the other.
1) Drivers can drive for either and they tend to prefer the higher payments from Lyft, among other things.
2) According to the drivers, Lyft does a better job of screening and some say they personally prefer to take Lyft late at night.
3) There's now more base-price Lyft vehicles in my neighborhood than Uber (see point 1). It's been a surprisingly fast transition. Uber has many more premium vehicles around my neighborhood still.

So yes, this is a bit anecdotal but if Lyft could so quickly infiltrate Uber's "first mover" advantage I see no reason why Tesla can't do the same. They have a couple of advantages:

Teslas have cache, so people will choose them all other things being equal.

Tesla knows where all their cars are all the time. Uber/Lyft only know where a driver's phone is when the driver has activated the app. Tesla could alert an Uber-Tesla driver (right on the car's display) about a customer even if they're in Uber-driver mode.


Look for Tesla to grab a few key Lyft/Uber people in 2017.

 

[ggies07]

Tesla knows where all their cars are all the time. Uber/Lyft only know where a driver's phone is when the driver has activated the app.

ah, good point. That is definitely a safety play Tesla could use on the public once the roll-out is well under way.

The app is a nice safety feature now, but that's just another advantage for EVs/Tesla network.

 

[callmesam]

I started the dogpile on Uber because, as others have mentioned, their moat is incredibly shallow.

It's a %$^#@ app. Tesla already has an app that does the same thing. Tesla's app has far more data and power over the vehicle.

1. Cost per mile for EV is much better than the alternative in every category: Sedan, SUV and Model 3

2. Tesla will be able to vet, qualify and purge "riders" who dirty or damage an autonomous ride. They have service centers that can clean, maintain and service their fleet of vehicles. Uber?

3. Tesla cache . . . Tesla is a much better experience than the "variety" of cars available from Uber.

4. Uber doesn't have a single taker on their offer to buy 500,000 cars. Travis already asked Elon, who said flat out, NO.

5. There is no guarantee that a "bolt-on" aftermarket autonomous system will be available in 4 years, but Tesla will be delivering the hardware with the 3 but not yet the full software implementation. That means valet service on all private property. The public road law/regulations will be here "soon" after.

6. Uber's model is not based on spending capital or having employees. Vehicle owners finance or buy cars that they put into the fleet and use with their own labor. Drop the driver, then Uber will have to share the profit with the owner. Basically a finance method for car ownership. But then why have the private ownership in the first place. See how circular it gets?

7. Here Tesla can utilize owner vehicles and their own vehicles equally, share revenue to those who "invest" early and can be a truly distributed sharing model. If you don't like the free fuel (Supercharging), best fleet, mobility on demand offered by Tesla, you can sign up to have Uber or Lyft share your car without a driver.

8. Uber's big "splash" in Pittsburgh with 2 driver "driverless" cars is sad where a fleet of Google cars has been operating for 4 years and Tesla autopilot is gathering millions of miles per day. Uber is not a leader in autonomous research. They are an also-ran who just acquired a small truck company and is partnering with Volvo after departing the market in China.

 

[pGo]

@callmesam , I don't think it's simple as it's just an app. Otherwise you would have seen Lyft acquiring a lot of share and new entrants everywhere. Dominant positions like Ubers are not that easily broken. What benefits do consumers who use Uber have to switch? Currently Uber matches or has lower prices compared to Lyft or Ola. And Uber simply works.

 

[ggies07]

A very insightful article into the inevitable change of our transportation system. The author lists the negative impacts autonomous EVs will have on our society, but gives proactive examples of what we can do to be ready for this change.

Self-Driving Cars Will Improve Our Cities. If They Don’t Ruin Them. — Backchannel

 

[EnzoXYZ]

A very insightful article into the inevitable change of our transportation system. The author lists the negative impacts autonomous EVs will have on our society, but gives proactive examples of what we can do to be ready for this change.

Self-Driving Cars Will Improve Our Cities. If They Don’t Ruin Them. — Backchannel

Definitely one of those short term losers and long term winners that comes with technology. Much of the listed consequences are irrelevant but has some insightful point I've never thought of.

 

[lolachampcar]

There are two broad stroke ways of handling life. You can do model years and cut in changes to your design in spaced out discrete design updates or you can cut in changes as you prove them on the fly. It would seem that the former is simply a way of dealing with the later which better represents how the world as a whole works.

Apply that to societies and we can attempt to "fix" the disaffected population problem which naturally occurs with inevitable change by (1) preventing the change, (2) some social program targeted at one specific group (ban coal - subsidize out of work coal workers) or (3) accept that there will always be life disruption as we progress through this world and build in mental approaches and support systems that allow motivated citizens to find their way.

It's the way life works. Some days you are the bug, others the wind screen. I just try to roll with it.

 

[callmesam]

@callmesam , I don't think it's simple as it's just an app. Otherwise you would have seen Lyft acquiring a lot of share and new entrants everywhere. Dominant positions like Ubers are not that easily broken. What benefits do consumers who use Uber have to switch? Currently Uber matches or has lower prices compared to Lyft or Ola. And Uber simply works.

If Uber is so excellent, would you drop it for a driverless service from Tesla?

Case closed.

 

[pGo]

If Uber is so excellent, would you drop it for a driverless service from Tesla?

Case closed.

Question is, when is the driverless service from Tesla is happening? I can see 4 years at least for regulatory approval. Even if Tesla is ready with AP2.0, there is no benefit to ride sharing until it is approved by regulators.

Hence, others will get a chance to catch up - even though I agree that Tesla is well ahead, but the regulatory approval delays would allow others to catchup. BTW, Uber is also in the driverless cars race. They have a huge presence around Carnegie Mellon campus and a lot of the smart folks there work on Uber driverless car project.

In an ideal world, yes, Tesla with a lead time of 2 years of driverless cars has a potential to kill Uber as they will beat the hack out of Uber on pricing to get market share. Will this happen, hard to say as nothing around Tesla has been ideal for past few years.

 

[callmesam]

Question is, when is the driverless service from Tesla is happening? I can see 4 years at least for regulatory approval. Even if Tesla is ready with AP2.0, there is no benefit to ride sharing until it is approved by regulators.

Hence, others will get a chance to catch up - even though I agree that Tesla is well ahead, but the regulatory approval delays would allow others to catchup. BTW, Uber is also in the driverless cars race. They have a huge presence around Carnegie Mellon campus and a lot of the smart folks there work on Uber driverless car project.

In an ideal world, yes, Tesla with a lead time of 2 years of driverless cars has a potential to kill Uber as they will beat the hack out of Uber on pricing to get market share. Will this happen, hard to say as nothing around Tesla has been ideal for past few years.

1. Assumes 4 year regulatory delay . . . not sure why this time frame is a best guess. No citations.

2. Uber's recent announcements pale in comparison to the experience by Lyft, Google, and especially Tesla. CMU is wonderful, but isn't how you create a product.

3. Even if Tesla and Uber enter the markets at the same time (stupid assumption) Tesla will STILL have a lead due to an entire EV/connected fleet of vehicles. Uber . . . who knows . . . but they don't actually make anything now, so I'm not sure why we should assume they'll master manufacturing of vehicles and systems in that time.

 

[landis]

I found these two items on 'All Things Considered' 2016-08-22 to be relevant given the above points on benefits of 'network effects'.

• Uber Competitor In NYC Promises Drivers Benefits, Even Employee Status
• Rental Car Companies Face Challenges In Age Of Ride-Sharing Services

Of particular interest to me was the potential advantages rental care companies may have from their 'fleet management' competencies they can bring to this autonomous care sharing space.

As I think was mentioned above, aren't both the Tesla SC (supercharger and service center) networks significant advantages in this fleet management space?

Meanwhile Uber faces an owner/driver inflection point to navigate.
So I would seem there will be interesting times ahead...

 

[pGo]

1. Assumes 4 year regulatory delay . . . not sure why this time frame is a best guess. No citations.

2. Uber's recent announcements pale in comparison to the experience by Lyft, Google, and especially Tesla. CMU is wonderful, but isn't how you create a product.

3. Even if Tesla and Uber enter the markets at the same time (stupid assumption) Tesla will STILL have a lead due to an entire EV/connected fleet of vehicles. Uber . . . who knows . . . but they don't actually make anything now, so I'm not sure why we should assume they'll master manufacturing of vehicles and systems in that time.

1. Elon Musk did everything but confirm that Tesla Model 3 will be fully autonomous [Video]

Mr Musk thinks 2 years for Tesla to nail it down. + at least a year for regulatory approval. This is how I get to 4 years.

Read more on NHTSA response to google autonomous cars: Google -- compiled response to 12 Nov 15 interp request -- 4 Feb 16 final

NHTSA has no clue on so many of the rules required and I feel that this will be a gradual approach and not a switch.

2 &3 Uber is not planning to develop a car. And they don't need to. They are adding retrofitted solution and if required, many companies will line up to sell cars per Ubers needs. Sensors and cameras can be retrofitted as long as the brain is developed and that's what uber is working on around CMU.

 

[Turing]

Either way Uber's margins are going to be driven way down in a self driving market. As it only takes a few 100k self driving cars and a ride app to disrupt what Uber has today. People will happily download a competing google/apple/tesla self driving app if it is noticeably cheaper per ride or if it offers self driving rides before Uber, ect. Right now, there is a limited amount of drivers and Uber has the most human drivers and users, but it would only take around 250k self driving cars to reach Uber's comparable human driver coverage and response time. And the percentage of car owners who would be willing to lend their self driving cars when not in use is a lot higher than the percentage of car owners who would actually want to actively drive their cars for Uber/lyft. With Tesla's approach of letting people lend theirs cars when not in use(which is most of the time) this will in short order turn ride sharing into a super thin margin commodity type market, no?

 

[EnzoXYZ]

What's to stop any individual purchasing a fleet of M3 to use for ride share? All I see are bunch of old businesses in trouble especially ICE dependents.