Tesla Network - for profit ride sharing managed by Tesla

[Brando]

Think about this as one possible use:

NY Law firm:

An average lawyer bills at $400-500/hr, has a family, lives in Connecticut/New Jersey with a 1.5 hr commute each way. Has the option to a) drive self with 3hrs of lost productivity/day b) go by train with 1.5 - 2 hours of lost productivity per day depending on if they can work during the commute c) hire a driver/Uber at a cost of $250-300/ day (conservative). Usually it is a hybrid mix of all three.

Firm decides to buy a fleet of Model S/X. Even without the possibility of shared rides, car picks up individual who now bills for 2-3 more hours/day. ROI is $750-$1500/day. Send the car to get the billing attorney (consultant, etc.), drives individual(s) into town and drops them at the office. Drives out of NYC and parks in a cheap lot in Jersey, or heads to the supercharger to recharge, instead of parking in a costly downtown garage. The car is summoned to pick them up and take them home. Autonomous driving pays for itself in about 2 weeks (10 days at $750/day) and the Tesla is paid off in 3-6 months ($750/day x 100-120 days) from increase in billable hours.

Some may think this is a niche case, but I would guess there are hundreds of thousands of professionals that meet this criteria in each major city - Chicago, New York, Los Angeles, Dallas, San Francisco, Tokyo, Amsterdam, Beijing....etc. if there was a worry about Model S or X demand exhaustion going forward, you have a potential for a dramatic increase in fleet sales to high end businesses to increase billable hours and productivity.

Sadly, lawyers often lie about billable hours. How can anyone bill 40/week? Let alone 60 or 80 per week. So economics may not be so clear cut. BUT, time savings and convenience will surely play a very large roll in deciding to use this "Tesla Fleet scenario".

 

[landis]

BUT, time savings and convenience will surely play a very large roll in deciding to use this "Tesla Fleet scenario".

Certainly, and same thing with standalone 'self-driving'.
Yet another counter example to the old 'you can't buy time'.
Now if I was to spend two hour round trip commute reading TMC, that would still be valuable right?
Since I would be caught up when I get home.

Still thinking about whether I would allow my M3 to work on TN while I work in the office.
Ability to catch ride home on another TN vehicle in an extraordinary set of circumstances could make it plausible.
This thread has me thinking about reserving a second M3.

 

[Gwgan]

To tell them they'll get a cheaper monthly payment if they make their car available on the Tesla Network for 20 hours a month or something like that

And not count Network miles against a lease, but that would be a headache for the lenders to be able to predict the lease-end value

 

[SebastianR]

I believe I heard the NVidia CEO say that out of the 10 trillion transportation market, cars are "only" 2 trillion whereas shuttles/taxis/limousine services are 5 trillion. Does anybody have better numbers on that? If Tesla can only capture a small fraction of that, I think they will be huge.

 

[Brando]

And with autonomous, taxi/uber/lyft/etc will be a growing market just like EVs. The two go hand in hand, right? Cheaper to operate, maintain and automate. Very disruptive.

 

[RocketGoBoom]

I could see people purchasing a few Teslas and putting them on the Tesla network 100%.
As long as the daily income adds up to more than the loan payments, insurance and electricity bills, it works.
The owner is basically just leveraging their personal credit score with a few auto loans.

My last Uber trip cost me $23. The driver told me he keeps 90% of the revenue.
So a Tesla really just needs to make about 3 trips per day at $20 each to generate $1,800 per month. (30 X $60).
That would just about cover the loan payment, insurance and energy.
So your Tesla is profitable on trips 4, 5 and 6 for the day.

There are some people that rent apartments and put them 100% on Airbnb. The short term rentals add up to more than the monthly rentals.

 

[Johan]

I could see people purchasing a few Teslas and putting them on the Tesla network 100%.
As long as the daily income adds up to more than the loan payments, insurance and electricity bills, it works.

There are some people that rent apartments and put them 100% on Airbnb. The short term rentals add up to more than the monthly rentals.

But if this was the case, that your Return on Investment, could be more than 100% from day one then everyone with capital would buy up such cars and put them out in the network, which would either drive down price or reduce the amount of business each car sees, there's not such thing a sure-fire way to make money.

 

[RocketGoBoom]

But if this was the case, that your Return on Investment, could be more than 100% from day one then everyone with capital would buy up such cars and put them out in the network, which would either drive down price or reduce the amount of business each car sees, there's not such thing a sure-fire way to make money.

Very true. But that math would put a lot of Teslas on the road for the Tesla Network until the critical mass of vehicles starts driving down the revenue you can earn.

Tesla would sell a lot of cars into that network in the buildup process.

If it works as imagined in my head, I would likely buy a extra Tesla with minimal options and full autopilot, then put it 100% on the network in fully autonomous mode. I would have my car programmed to stay within 30 or 40 miles of my house and just turn it loose. Programmed to come home when it is at 30% charge level or whatever safety level it needs to make it back to home base for a recharge. Someone at home (me, wife or kids) could just plug it in whenever the car returns to base, then turn it loose again.

 

[Mexxton]

I am convinced that the Tesla network is going to be used by traditional Taxi companies.

In Europe these companies are currently threatened by
1) Uber
2) Upcoming Diesel regulations
3) high costs because of the expenses for human drivers

Using the Tesla network will be a solution for all of the above.

Using Tesla EVs will save on maintenance costs as well as expenses for human drivers and might be their only choice in competing with an autonomous Uber fleet.

I can imagine these companies choosing a Tesla each time they need to replace an existing Mercedes Diesel Taxi. I guess this is going to be a win/win for Tesla and Taxi companies.

Also they already have the issue of cleaning their cars after being used by drunk "users".

 

[brianman]

Someone at home (me, wife or kids) could just plug it in whenever the car returns to base, then turn it loose again.

Just buy the "home snake" instead.

 

[Pando]

It won't be long until folks with nefarious intentions figure out a way to quickly disable the GPS/Cellular connection when the car picks them up and commandeer the car (or just tow the thing) to be parted out or shipped via container overseas where you'll never ever see it again.

 

[RocketGoBoom]

It won't be long until folks with nefarious intentions figure out a way to quickly disable the GPS/Cellular connection when the car picks them up and commandeer the car (or just tow the thing) to be parted out or shipped via container overseas where you'll never ever see it again.

Well, they would certainly get a poor review from me in that scenario.

 

[Johan]

Well, they would certainly get a poor review from me in that scenario.

"1/5. Car was stolen and shipped overseas. Would not rent again."

 

[Mark Harvey]

I personally viewed the announcement of fully autonomous features on all current vehicles being produced as the biggest boom for the company in many years. This is because the economics of an autonomous vehicle will mean that a Tesla purchased today will likely increase in value as more autonomous features are added. Meaning, If you buy a model 3 in 2017 for 35k, you will probably have no problem selling it a year or two later for 35k or more because of the potential revenue opportunity of ride sharing your vehicle. So basically all 150K+ Model S/X units in the fleet are obsolete and there will be strong demand for the new fully autonomous hardware vehicles. Tesla just secured demand for the next year on the S/X side.

Key to Q4 2016 earnings report will be the increase in customer deposits from reservations for the Model 3. If i was a betting man, I would bet they will achieve 500k+ reservations as a result of the full autonomy hardware by December 31 2016.

 

[maxell2hd]

I believe I heard the NVidia CEO say that out of the 10 trillion transportation market, cars are "only" 2 trillion whereas shuttles/taxis/limousine services are 5 trillion. Does anybody have better numbers on that? If Tesla can only capture a small fraction of that, I think they will be huge.

538 estimated taxis at the $100 billion range. $5 trillion on driving other people around is absurb, that's almost as much as the world spends on food and more than it spends on oil even at $100/barrel.

 

[RocketGoBoom]

538 estimated taxis at the $100 billion range. $5 trillion on driving other people around is absurb, that's almost as much as the world spends on food and more than it spends on oil even at $100/barrel.

I recall reading an article about Uber where it was estimated that the entire USA taxi revenue was only about $15 billion. The point was being made that the $60 billion valuation of Uber was a bit crazy.

 

[Johan]

Elon Musk on 2016Q3 call: The customer (car owner) will get to keep "most of the profit" from ride sharing in the Tesla Network.

Also: "It's not Tesla vs. Uber - it's the people vs. Uber"

 

[GoTslaGo]

Elon Musk on 2016Q3 call: The customer (car owner) will get to keep "most of the profit" from ride sharing in the Tesla Network.

Also: "It's not Tesla vs. Uber - it's the people vs. Uber"

This makes sense, since a Tesla Network participant will have paid their dues by buying a Tesla. Tesla would just facilitate the process. Nice.

 

[Johan]

My quote above is a bit off, should be:

"It'snot Uber versus Tesla, it's Uber versus ... people."

 

[SBenson]

From the transcript

"Sometimes, it's been characterized as Tesla versus Uber or Lyft or something like that. It's not Tesla versus Uber; it's the people versus
Uber."

Here is the full section:

Charlie Anderson:
"Thank you. I'll ask just one question. There was a reference to the Tesla network and the ability to buy self-driving today. So I wonder, Elon, if you could talk maybe philosophically about how you're viewing Tesla network. Is it something that will generate income for Tesla? Does it help develop future products, etcetera, at a reasonable gross margin? Or is it something that you'll use more for market share gain, help people offset the price of the car long-term? Thanks"

Elon Musk:
"All right. Sorry. Just talking internally for a second there. I think it's a bit of both, really. This would be something that would be a significant offset on the cost of ownership of a car and then a revenue generator for Tesla as well. Obviously, the majority of the economics would go to the owner of the car. Sometimes, it's been characterized as Tesla versus Uber or Lyft or something like that. It's not Tesla versus Uber; it's the people versus Uber."