By
Svetlana Soroka
April 18th, 2024
Tesla plans to join the ride-hailing business as soon as 2020 with Elon Musk saying the owners whose cars participate in the Tesla network will keep up to 75% of the generated revenue.
Advancement in technology keeps changing the way people live. Imagine having an autonomous vehicle dropping you at your workplace. Once you are through with your day at the office, you summon your ‘workhorse’ to take you home. That is the future that Elon Musk dreams about and it may happen sooner than it was thought possible. Thus, Tesla will render Lyft and Uber obsolete.
Tesla Will Thump Lyft and Uber in the Rideshare Wars
There are times when being first does not guarantee victory. That is the lesson that Tesla is about to teach Uber. This assumption comes after Tesla CEO, Elon Musk, revealed his master plan to dominate the ride-hailing business.
It is not the first time that Musk has talked about his company’s projected dominance in the industry. Recently, we published his prediction that the company will grow to $500 billion due to its new self-driving technology. The company also confirmed that it was boosting its convertible notes offering to $1.6 billion, according to filings.
The new strategy is simple. The company aims to develop a ride-hailing network that enables Tesla owners to subtract or add their self-driving vehicles to the fleet. The cars in the Tesla network will join a fleet that autonomously picks and transports passengers to their destination. All this takes place while the owner is at work or taking a vacation.
When the owner needs their car back, they can simply subtract it from the network. Then, they can summon it to their location. Musk said that the car owners will retain as much as 75% of the generated revenue.
That model seems quite attractive to the car owners. They have total control on when and when not to share their vehicle. Furthermore, the passive earning generated can help ward off the repo man.
Musk’s Major Announcement
Musk revealed in a video that the Tesla network might go online as soon as next year. He further explained how the integration of the Airbnb and Uber business models would put Tesla ahead of all competition. That will eventually position the company as a long-term leader in the business. He said:
“There will be Tesla dedicated cars for ride-hailing and any customer will be able to share their car at will, just like you share your house in Airbnb… so it’s a combination of those two models [Uber and Airbnb].”
Musk said that in cities where demand surpasses the supply of customer-owned vehicles, the company will run its fleet. That will guarantee that passengers can always rely on the company to offer dependable transport services. Also, the CEO highlighted that Tesla will have millions of fully autonomous cars in the field and nobody else will have that.
With an army of robo-taxis and an enticing passive income pitch for car owners, it seems like the days of Lyft and Uber are ending.
Uber and Lyft Responsible for their Demise
Recent developments reveal that Lyft and Uber may become extinct once Tesla enters the playing field. Last week’s global driver’s strike exposed an underlying fault in how the companies operate. Business Insider noted that these ride-sharing firms pay poverty wages without generating consistent profits. To remain operational, the firms turn to increase the average hourly rate of drivers.
The current rate stands at around $11.77 after various deductions like vehicle expenses and company fees. That strategy is guaranteed to hurt revenue. Thus, Uber and Lyft are courting trouble struggling to generate consistent profits while keeping their drivers satisfied. Fortunately, commuters stand to gain when Tesla’s network become operational soon.