Robotaxis Are Coming In 2021? Are You Ready For The Future Of Ridesharing? Tesla Is!

On Autonomy day, Elon Musk revealed that his fleet of Robotaxis should be ready to launch in 2020. The COVID 19 pandemic put a damper on that timeline, but if Elon Musk can be taken by his word in last night's Q4 2020 Earnings call, Tesla is well on its way to full autonomy. Tesla’s technology in this regard is ages ahead of the other car manufacturers who are struggling to find a decent OS that can make their EV’s communicate better. Tesla cars on the road represent a neural network of cars that all collect information in real-time on real roads, this type of information is vital in the development of an autonomous driving network and Tesla is the only company that is getting this real-life data, which is also why Musk said he can offer car insurance to Tesla drivers at a third of the price of what other insurers are offering simply because they have the data to more accurately predict the probabilities of injury.

A good comparison here is Netflix, Netflix is so successful because it was the first streaming service that collected massive amounts of data about the viewing habits of its subscribers. This data feeds the algorithm to become more efficient, in the case of Netflix, the algorithms' job is to identify which movie concepts are interesting to which type of subscriber. Entire movies have been simply based on information provided by that algorithm, not based on some writer’s creative imagination, but entirely conceptualized by viewing habits and then realized into a traditional movie format, the concept works. Netflix is the undisputed top dog when it comes to streaming services for that reason alone, and since they started earlier than everybody else with collecting this data their algorithm is so far ahead of others that it's hard to catch up.

Tesla has the same type of advantage, it’s autopilot has been in operation for years now, and even though it is not fully autonomous it has been collecting driving data and because all Tesla's on the road are linked and have such a sophisticated network that connects the cars to a central neural network the car is steadily learning. Tesla created this neural network and patented it, it works similarly to the human brain as it is connecting data collected through over 500,000 Tesla vehicles that all have several cameras on them and monitor the driving behavior of the driver and others on the road. Other EV’s don’t do that. In 2019 The CEO of VW has voiced this concern in a letter that was not supposed to be released to the public but was obtained from a German car magazine which states:

” What worries me the most is the capabilities in the assistance systems (Tesla’s autopilot). 500,000 Tesla’s work as a neural network that continuously collects data and offers the customer a new driving experience every 14 days, with improved properties. No other automobile manufacturer can do that today”

He should know since VW is the parent company of Bentley, Porsche, Lamborghini, Bugatti, and Audi some of the most high-end vehicle brands in the world both in engineering and technology. The world's top car manufacturers are saying behind closed doors that they are not capable to do what Tesla is doing today. Tesla’s technological superiority in the domain of autonomy is undeniable, let us hypothesize where this could go.

Tesla is not only planning on building a fleet of robotaxis, but they also want to allow current Tesla owners to participate in this venture by making their personal vehicles available as robotaxis. The company said that it would create a platform like ridesharing companies or AirBnB where individuals can offer their cars and other individuals can hail these vehicles to transport them. In theory, a Tesla owner could activate their vehicle’s "robotaxi mode" on a Friday night and go to bed. The car would receive requests from people that need to go somewhere, and the car would drive to get them, deliver them to their desired destination, and drive back home to wait for another customer. Let that sink in for a moment.

Not only could this create a passive income for the owner of this vehicle, but it would also create additional revenue for the company which already said it would get around 20-30% of the revenue for a ride-share. The concept is almost identical to UBER’s concept, just without the driver. Now, several points need to be addressed before this could become a reality.

1. Municipal approval. Uber is already banned in several cities and countries around the world because it disrupts the taxi industry, is arguable highly unregulated and lacks opacity in some of its business practices.

2. Federal regulatory approval. Believe it or not, there currently is no regulation for autonomous vehicles, there are only municipal restrictions and voluntary guidelines.

3. Cost. Tesla’s are arguably not cheap, even though there are very close in price to the average car sold in the United States. The cost of acquisition and maintenance is high enough to make an argument that using a Tesla as a taxi for a primary source of income is not economically feasible.

The bottom line is, Robotaxis are coming, they will revolutionize the ridesharing experience, and Tesla is at the forefront of this revolution simply because they have the technology and innovativeness required for the inevitable evolution of technology. UBER and Lyft could benefit from this. Could Tesla buy Lyft or UBER? Yes, but it would possibly be a little too ambitious because the regulatory landscape does not support such a costly investment just yet.

Thanks,

The Punkrock Capitalist