I'm skeptical: financial viability of Tesla-exclusive rideshare service

[calisnow]

Usually an optimist and a believer in Tesla's ability to execute - but I've finally found something about which to be skeptical - the business viaability of a Tesla-exclusive rideshare network ie the "Tesla Network."

Personally I think this is a harder problem than full autonomy because it's a critical mass problem. As a ride share user, I do not care whether a human is driving or not - I just want to be picked up and picked up NOW.

Uber delivers that experience in most places I go in California - but it does so by leveraging lots of humans driving lots of inexpensive cars from many manufacturers. It's hard for me to imagine Tesla getting a critical mass of rideshare participants any time in the next few years so that the service becomes practical for users - and thus popular enough to at least break even.

On the other hand I could be wrong. If the cars exist anyway sitting around in customer garages, all Tesla has to do is build a software platform and take a slice of the revenue.

But again on the other hand if rideshare profits were that easy Uber and Lyft would both be relaxing. Uber claims to be profitable in the U.S. but Lyft is still losing money - and both are far larger than a Tesla network would be for years.

 

[CHG-ON]

I agree with @calisnow. I could see an Uber Black in a high end populated area. Maybe. But I would never do it. I didn't drop 130 large to haul around strangers in my girl. Also, it would never pay off financially to the level that I would want. I certainly didn't become able to buy her by playing chauffer.

Uber's success as a company is volume and paying it's drivers sh-t. And treating them that way too.

 

[S4WRXTTCS]

I'm skeptical of the long term financial viability of it as well, but I think it's important topic to drum up financial backing. It makes more sense on a power point presentation for a 10 year plan than anything anywhere close to right now. Money people love the idea of monetizing a service.

In 10 years the software/regulations/hardware will be more defined and potentially people could have used Tesla's as second cars that could work. I could see it being viable if it was a second car that I didn't care so much about. There will also be a fair amount of Tesla inventory from people who trade in their cars to upgrade to something even more fancy. So it gives Tesla a way to make money off of a car that would normally sit there.

As a ridesharing service it could potentially do well for those of us that dislike interacting with humans. Uber will likely have an option as well.

It probably makes more sense for Tesla than it does for a car consumer. Tesla has to continue to make money when people are no longer buying cars. So you profit off the ridesharing, and you profit off the energy.

It's like a lot of things when it comes to Tesla. It makes absolutely no sense now, but way down the road it makes total sense.

 

[Roger t]

I use both Uber and Lyft apps. A lot of drivers drive for both too. By the time Tesla network is allowed by regulators, there will be more than one million self driving Tesla on the road. Even with a fraction of owners sharing, it would be the same number as Uber today.

 

[xborg]

It'd make more sense for Model 3. Cheaper and highly available.

I wonder If they'd make a premium members only option. Like: "If you own a Tesla, and activate the ride-sharing network on your car, wherever you go, you can use any Tesla, anywhere in the world, free forever, as long as you keep your ride sharing activated"
Or maybe a points based system,

But anyways, self driving ridesharing is years away.

 

[PtG62901]

Going to San Francisco, not renting a car. Will Uber or Taxi. I think Tesla's idea for ride sharing will work, at least in the city. Uber, without the human driver? That makes sense.

 

[emchen]

Time to revive this discussion methinks, with Elon tweeting about it a while back and Cathie Woods evangelizing for it, I'd like to hear member discussion on this subject.

 

[whitex]

Time to revive this discussion methinks, with Elon tweeting about it a while back and Cathie Woods evangelizing for it, I'd like to hear member discussion on this subject.

So nothing changed then, just bunch of same empty hype. Revive it again when Tesla actually delivers level 5 autonomy.

 

[Gumball]

People were sceptic about electric cars also.

 

[2101Guy]

whats Elon's most recent date for Level 5 autonomy? Has he changed it yet? Was end of 2020 if I recall. THAT..aint happening.

 

[BlindPass]

Time to revive this discussion methinks, with Elon tweeting about it a while back and Cathie Woods evangelizing for it, I'd like to hear member discussion on this subject.

Has FSD improved much? More questions than answers at this point.

Imo the Tesla Network works better in countries with higher population density than we have in the United States, where car ownership is already relatively low and home charging is prohibitive. How large is the transition to work from home and what’s its impact on such a network?

There’s a dichotomy between Level 5 FSD and car manufacturing revenue imo. Outside of areas in which there’s already low car ownership, a sizable motivation to join the network will be from those that see the network as a cheaper option than owning a car. That’s inherently not a 1-to-1 revenue. There’s obviously ad hoc usage, but car sales are still reflective of “scheduled“ peak usage times (rush hour). It also encourages ride sharing, which puts further downward pressure.

Which could just mean Tesla dominates market share of cars sold, as Tesla is the best yet at the machine that makes the machine, treating cars like technology. It also has a ecosystem advantage with its data, charging infrastructure, and loyal owners that see themselves as part of Tesla.

But it’s one of the worst at post-sales infrastructure. Tesla has the Big Data moat that it currently protects with its warranty. But unless they improve and extend their warranty so that it’s covering all these high mileage robo taxis, which aren’t likely to be those just wanting L5 for their drive, their warranty threat is not prohibitive to a company capable of developing FSD and OTA. Perhaps Tesla stops selling its cars?

Imo there’s room for the industry to evolve in which the OEM isn’t the “fleet” manager. With L5 plus V2G, V2V, etc cars will be just another component IoT, and there are companies that can compete with Tesla in that space, namely Apple, Google, and Amazon. If Tesla introduces million mile batteries and V2G, one could easily see a Google couple Waymo as a home virtual power plant, competing (or buying) with utilities. Add in packaging home/auto insurance (warranty) functions from monetizing all the data from the IoT, and it’s a compelling option.

Maybe I’m just not wealthy enough, as I view Tesla’s chase of robo taxis as a contradiction. Teslas are priced at a personal car ownership level, with premium torque, but with robo taxis ethos (outside the drivetrain). Seriously, grocery bag hooks are too much on a $55k car. Most people able to have conspicuous consumption, which is a part of buying premium cars with L5 as personal chauffeur, are going to want something that has equal premium interior and ride quality. Tesla’s range and performance advantages are eroded in a L5 world imo. As newer cars, they’re too good (expensive) for robo taxis, but too spartan for personal L5 taxis. As higher mileage used cars they’re better suited for Robo use, but there’s that warranty question at that point.

 

[TheTalkingMule]

Funny to look back and see people speak of Uber's "success". They've lost what.....$30B since this thread started?

If(when) Tesla can figure out the backbone of an autonomous network and start implementing, it will be worth bazillions.
Will that be in 2020? No.
2022? Possibly.
2024? Probably.

 

[ammulder]

I still think it's an open question whether Tesla can deliver level 5 autonomy / robotaxis with the current hardware.

I am willing to credit Elon's claim that vision could be enough and LIDAR is not necessary.

I'm just not sure my Model 3 has the camera coverage to make it work. There are plenty of awkward intersections, with bushes or other obstacles blocking vision to the sides, where drivers crane their necks and even so edge forward a tiny bit at a time... such that it's not obvious to me that the existing cameras can 100% cover the necessary angles. If you had side-looking cameras mounted near the front bumper that would go a long way, but with the side-looking cameras mounted significantly farther back, I'm just not sure.

But I'm not willing to rule it out, either, as humans manage decently well from a position of the driver's seat.

I guess we'll see how the "march of nines" goes.

Back to the original questions, I'm not sure I'd want to robotaxi-out "my" 3P, but if robotaxis were delivering $30K a year in proceeds (which I think was the initial claim), there would be a pretty good case for picking up a 3SR on the side, and that would drive network coverage. It should be price-competitive with Uber/Lyft on account of no driver cost. I don't think the fundamental model is broken, I think we just don't have enough visibility into the full-autonomy future to nail it down.

 

[emchen]

Nice discussion, my reference to Cathie Woods of Ark Invest is to bring up their advocacy for a "beta version" of the Tesla network to be launched right now before L5 autonomy is achieved. They describe a non-autonomous network to compete with Uber and Lyft, isolated to large metro areas in CA, NY, Chicago (as examples), to "learn" the ride-hailing business. They state that the major benefit is to mitigate risk of achieving L5 autonomy substantially longer than Elon thinks. A minor benefit is a substantial increase in data collection aimed at ride-hailing corner cases.

In my mind, drivers can leverage the lower cost of operating an efficient EV right now. I have observed that many drivers already cycle between Uber and Lyft. Riders also cycle between the two services with ease. Imagine a Tesla Network without autonomy right now, and the drivers can sustain themselves in the early stages by cycling between the three. Personally, my wife's 2016 7-seat Model X is soon to be replaced by a new version with foldable 2nd row seats that I have on order. I am tempted to loan out the old X (which has unlimited supercharging) to a rideshare driver for $1200-2000 per month. Minus the fuel cost + maintenance of a comparable ICE-SUV on UberXL or Lyft Premium ($600-$1000/mo conservatively), the economic benefits quickly adds up for that individual. Meanwhile, I'll get enough revenue to cover monthly payments on the new car. Now imagine purchasing used Model S and X's with transferable "free supercharging for life" and pretty soon one can have a fleet of them to lease out to drivers.

Do you think it'll work? Tweeks and suggestions? Let me know.

 

[whitex]

Nice discussion, my reference to Cathie Woods of Ark Invest is to bring up their advocacy for a "beta version" of the Tesla network to be launched right now before L5 autonomy is achieved. They describe a non-autonomous network to compete with Uber and Lyft, isolated to large metro areas in CA, NY, Chicago (as examples), to "learn" the ride-hailing business. They state that the major benefit is to mitigate risk of achieving L5 autonomy substantially longer than Elon thinks. A minor benefit is a substantial increase in data collection aimed at ride-hailing corner cases.

In my mind, drivers can leverage the lower cost of operating an efficient EV right now. I have observed that many drivers already cycle between Uber and Lyft. Riders also cycle between the two services with ease. Imagine a Tesla Network without autonomy right now, and the drivers can sustain themselves in the early stages by cycling between the three. Personally, my wife's 2016 7-seat Model X is soon to be replaced by a new version with foldable 2nd row seats that I have on order. I am tempted to loan out the old X (which has unlimited supercharging) to a rideshare driver for $1200-2000 per month. Minus the fuel cost + maintenance of a comparable ICE-SUV on UberXL or Lyft Premium ($600-$1000/mo conservatively), the economic benefits quickly adds up for that individual. Meanwhile, I'll get enough revenue to cover monthly payments on the new car. Now imagine purchasing used Model S and X's with transferable "free supercharging for life" and pretty soon one can have a fleet of them to lease out to drivers.

Do you think it'll work? Tweeks and suggestions? Let me know.

Why not just lease Tesla's to anyone who wants to drive for Uber, Lyft, Amazon, or any driving service? Free supercharging in exchange for data collection - pretty cheap for Tesla to get a lot of ride hailing data, great for people driving and for the environment. Tesla will be having a bunch of Model 3 lease returns coming soon, so they could put them to good use.

 

[emchen]

Why not just lease Tesla's to anyone who wants to drive for Uber, Lyft, Amazon, or any driving service? Free supercharging in exchange for data collection - pretty cheap for Tesla to get a lot of ride hailing data, great for people driving and for the environment. Tesla will be having a bunch of Model 3 lease returns coming soon, so they could put them to good use.

Essentially what ARKK is advocating. A lot of synergy's there.

 

[STARR X]

I drive for Uber & Lyft in a 2012 Model S. Been thinking about the August 8 announcement about robotaxi and wondering whether a Tesla driving app will be mentioned at that time too. I think Tesla could easily offer a one year lease on a Model 3 or Model Y with unlimited miles with FSD. Tesla probably will not lower the price of purchasing FSD outright from $12,000 as FSD adds value to the car. If Tesla can offer a total 1 year lease of around $450.00 a month, people would be all over that.