Tesla announced that it would have over a million robotaxis—self-driving cars—on the road by next year
Tesla Co-Founder and CEO Elon Musk's recent announcement about the carmaker's foray into the ride-sharing industry is a cause for concern for market leaders like Uber and Lyft. Tesla promised it would have over a million robotaxis on the road by next year.
Robotaxis are basically Tesla cars with self-driving functions. Through a company app, any Tesla owner can turn their car into a robotaxi. The same app can be used by people to request for a robotaxi, much like how an Uber or Lyft is called, except that this one would not have a driver.
To become fully autonomous, the cars also need a special computer that fits behind the glove box and is powered by a special chip that Musk boasted is better than any other processor in the world 'by a huge margin'.
There have been safety concerns about a car, which runs without the judgement of a human driver. Despite this and other regulatory challenges, Musk is very confident in predicting the launch of this programme by next year in some US states.
These taxi rides may also cost less, Musk predicted. They could be significantly less than an Uber or Lyft, which may make it attractive to customers. He said that an average car-sharing costs $2-3 per mile at present, whereas Tesla's robotaxi may cost just about $0.18 per mile.
Even car owners stand to make a lot of money by turning their cars into robotaxis. Musk said one robotaxi could deliver profits worth $30,000 per year.
"The fundamental message that consumers should be taking is that it is financially insane to buy anything other than a Tesla," Musk said.
This announcement comes at a time when Lyft made its debut on the stock market in March and Uber's initial public offering is expected sometime in May. California-based cab-hailing service Lyft has been having a hard time at the market as investors have sued the company for overhyped claims only three weeks after its debut.Even Uber's IPO has raised questions among investors as its prospectus hoists major red flags. Uber's revenue growth rate declined from 106 percent in 2017 to 42 percent in 2018. Even these figures are blown out as they don't account for extra incentives given to drivers. According to the prospectus, if we strip driver incentives, Uber's core platform adjusted net revenue grew 39 percent in 2018 from $7.2 billion in 2017.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.