ArkInvest analyst Sam Korus increased X last week to refute claims Tesla Inc. TSL Vision for operating a fleet of autonomous vehicles is unlikely to work.
What happened: Tesla boss Elon Musk expects his company’s robotaxi fleet to function like a combination of Airbnb and Uber. While a certain portion of the fleet will belong to Tesla, individual customers will also be able to add or remove their vehicles from the robotaxi fleet as they wish.
Riders can hail a car using the Tesla app, Musk said last month during the company’s second-quarter earnings call.
However, not many people are convinced of the functionality of this model, including Uber CEO Dara Khosrowshahi He raised concerns including whether a car owner would want to let a complete stranger ride their car. He also pointed to other concerns including problems meeting demand, as individual drivers may want their vehicle at the exact time when demand is at its peak.
But Arks Korus does not share these concerns.
“The demand is there if you offer rides at a certain price and with a short pickup time. Robotaxi solves the driver side of the equation, which is the difficult and costly part,” he said.
Some drivers drive for Uber and Lyft without making much money and would like to earn money without sitting in the car, he said, refuting concerns from people who do not want to give their vehicles to the robotaxi fleet.
By offering drivers incentives to use their cars on the robotaxi network during times of highest demand, they will ensure sufficient supply when demand peaks, he added.
“In general, I think people underestimate the operational complexity of the Uber model compared to Tesla’s positioning,” said Ark Venture Investment Chief Futurist Brett Winton added to Korus’ ideas.
Uber’s ground operations, including driver recruitment, are expensive and labor-intensive, and Tesla conceptually has a much simpler job, Winton said.
Tesla CEO Elon Musk seems to agree with the Ark experts, as he answered: “Yes.”
Why it is important: Uber’s CEO expressed doubts about the feasibility of Musk’s robotaxi vision in an episode of the Logan Bartlett Show earlier this month.
Building cars and running a taxi fleet are “very, very different” businesses, Khosrowshahi said at the time. In running a fleet, the company has to match people with their rides and price the rides economically, while also addressing other problems, such as people getting sick in cars, items getting lost or being involved in accidents, he added.
In the future, autonomous cars will function like restaurant chains such as McDonald’s or Starbucks, which have a direct channel to customers and also use third-party channels to ensure full utilization of their restaurants, said the Uber CEO.
“If you want to drive the use of this asset, you’re definitely going to want to go to third-party providers, and if you also want to develop your own first-party channel, that can be true. It doesn’t have to be an either-or,” Khosrowshahi said, while also expressing optimism about a future partnership with Tesla.
Tesla is expected to unveil its robotaxi product on Oct. 10. The event was originally scheduled for Aug. 8, but the company postponed it to make some key changes to improve the robotaxi and to give itself time to prepare a “couple of other things” to showcase at the event, Musk said in July.
For more information on Benzinga’s coverage of the future of mobility, visit follow this link.
Read more:
Image created with Midjourney
Market news and data provided by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
