Published on October 28th, 2016 | by Steve Hanley
Musk Calls Tesla Network “People Versus Uber”
Elon Musk’s Master Plan Part Deux suggests that once Tesla automobiles become fully autonomous, owners will be able to share their cars with others and generate income to offset a portion of their lease payment or monthly car loan. “Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self driving car is likely to be several times that of a car which is not,” wrote Musk in July. “In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.”
That reference to Tesla operating its own fleet has led to speculation that Musk and Tesla plan to take on Uber and Lyft in the ride sharing industry. During the Q3 earnings call on October 26, Musk made a rather cryptic comment. He said people have been characterizing his car sharing proposal as “Tesla versus Uber or Lyft or something like that. It’s not Tesla versus Uber, it’s the people versus Uber.” No one thought to ask a follow up question, so we are left to ponder the mind of Musk for clues to his meaning.
Here’s a hint. Tesla recently updated the fine print pertaining to the use of its Autopilot system. The new language bans vehicle owners from using their self-driving Teslas to pick up fares for Uber or Lyft when the technology finally launches in a few years.
Musk has had a few things to say about the nascent Tesla network. He says it is mainly designed to give owners a way to make money from their electric vehicles when they aren’t using them, not to enrich Tesla’s bottom line. “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.”
As of October 19, every Tesla will have the hardware necessary to allow full Level 5 autonomy built in at the factory. That will include the new Model 3 when it goes into production late next year. It may be years before Tesla gets approval from regulators to activate the software that will allow the cars to drive themselves but Musk, as usual, is thinking two jumps ahead of the competition.
Uber is rolling out autonomous cars of its own and purchased San Francisco start-up Otto, which focuses primarily on self driving trucks. Just a few days ago, an tractor trailer equipped with the Otto self driving system and loaded with Budweiser beer completed a 120 mile highway journey with no human in the driver’s seat.
If any conclusion is to be drawn from Musk’s off hand remark it is this. The time when people actually owned automobiles is coming to an end. In the future, we will merely be licensees of technology provided by Tesla or Uber or one of the major car companies. The manufacturers will retain control over how we use the cars they make, even though we have the privilege of paying for them. Welcome to the brave new world of cars as rolling computers enabled by proprietary software that belongs to the manufacturers, not the people who make the monthly payments.