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April 21, 2019 by Jennifer Sensiba
Tesla is taking bold steps to launch the Tesla Network, an Uber-type transport service in which a Tesla driver will accompany you. Recent research indicates that this could bring a lot of money not only to Tesla, but also to Tesla Owners who are willing to let their car participate in the network without using it. But will it be profitable for homeowners who do this?
The numbers look pretty sweet …
I will start by telling my readers recent article on the latest movements of Tesla. In short, they are confident enough in their autonomous technology to be able to bet big that this technology will be ready to drive in a totally unsupervised way in the next three years. It's a very big thing.
If you own a model 3 or consider one, it becomes an increasingly important part of future ownership projects. Cathie Wood, founder of ARK Invest, says her group's research indicates that Tesla owners will earn at least $ 10,000 a year participate fully in the Tesla network. For a car costing about $ 45,000 (basic model 3 with power transmission system), it makes all the difference between a car that is a depreciating asset and a real investment that goes out and earns its living while you sleep.
The longevity of Model 3 is another factor that could soften the pot more. Few Teslas have carried more passengers than Tesloop, and they have shared their experiences and opinions about it. Not only does the car last a long time, but the overall cost per kilometer drops with the much longer life of Tesla vehicles. People participating in the network could do a massacre over time.
If ARK Invest's and Tesloop's numbers prove accurate, a Tesla Tesla should be able to bring tens of thousands of dollars back to the owner before switching to recyclers, assuming the car is running. the estimated minimum. Some homeowners may be a little more than the minimum, making model 3 an attractive investment.
Healthy skepticism
A screenshot of the Uber driver registration page.
Before anyone (most of the time correctly) calls me a Tesla cheerleader, I'd like to point out that I've heard all these arguments before.
"Earn hundreds of dollars during your free time!"
"Be your own boss! Set your own schedule!
"Earn as much as you want!"
Carpool and delivery companies make rather bold but deliberately vague promises to hire drivers. Faced with a local photography industry that was collapsing and a need to fill the gaps in 2017, I decided to give a chance to "show economy". There have been times when it has worked and has brought part-time money. Later, I found myself doing it more and more, but once I went from a small part-time job to a number of tasks that normal people would consider as a full-time job, plus it has become clear that this is not something that continues to pay well during off-peak hours.
I fell into a trap in which many fell. The initial "dive" is right for you, so you decide to settle down, but then you find that the water is not the same as it was on the surface. An 8-hour day becomes 12, then 16; you then work until you let yourself down, sleep a little, and then work again. You put on weight, spend hours sitting in car parks near airports and desperately chasing all the little events in town. Pay the drops, then the drops again.
I have no reason to think that the Tesla network will prove to be like the economics of the entertainment market for many people, but I still have reasons to be very skeptical about it and pay attention to the signs that it is happening in the same way, and pay attention to the signs that it is happening differently.
The competitive landscape matters
One of the key things to watch for is the competitive landscape. Uber was excellent for early pilots, as was Lyft. Engineers and even lawyers were leaving their jobs and taking the pay route in some cities. And then race down start. With few things to stand out from, the services have embarked on a price war that continues today. They lowered rates below any hope of making a profit for themselves, hoping to run out of money later than their opponents, and then conquer the market. When that did not work, they routinely 'improved' the drivers' pay in an attempt to hide the pay cuts needed to keep lowering the rates.
I can not tell you in this article if Tesla's competition would force them into such a situation, but I can give you a quick overview of the competitors in the market they would face. Although this comes partly from my own experiences and observations, L & # 39; economist does a very good job in summary deeper.
First, there is Waymo. Former subsidiary of Google and Alphabet, the company already offers rides in Arizona. They face challenges, such as violent attacks, but they also continue to struggle with vehicles that do not do it alone. There is one person in the car as a replacement, and the passengers had to sign a confidentiality agreement to be driven by the service.
GM offers a range of variants of the self-driving Chevrolet Bolt that they use to create a driverless service. I've also seen these tests in the streets of Arizona.
Uber and Lyft are eager to get into the driverless taxi game. Obviously, their interest is to completely remove the pilots in order to keep their race down, at least for the moment. Neither one nor the other was very successful, and Uber took a lot of heat after an inattentive pilot chose to watch reality TV. rather than the road while the emergency braking system was disabled.
There are dozens of other small players, each with their own slightly different approaches, but in the end, there is a lot of competition trying to penetrate the driverless taxi market.
If Tesla enters without a competitive advantage, they will eventually reach the point where they too will be in the race to the bottom. This can only last until investors become aware of endless cash consumption and the race ends badly. However, unlike the current carpool with the same drivers and the same cars doing the same job, it is unclear for the moment whether one of the players will succeed or not, and if such a race to the bottom could develop.
To do this, Tesla must start with an obvious advantage and keep it for years. The founders of Tesloop seem to think that Tesla's technology will dominate others and do it. Other researchers say so too.
As I pointed out in a previous articleElon Musk is very confident in this. He thinks autopilot and full auto-steering are already better than others and improve much faster than the competition. Tesla is already collecting a lot more data on human drivers, autopilot disengagement and much more thanks to the LTE connections of cars. The other competitors do not seem to be close at the moment.
This question, as well as the technological advantages that distinguish Tesla from other players, will play an important role in Elon Musk's presentation of the 22. If you plan to use Full Self Driving as a source of income or as additional income, you will want know what he has to say and know if the technology will keep Tesla Network in a fierce race.
Other challenges and factors to consider
A screenshot of the Uber Driver application, showing that the salary is 2.1 times higher just after the closing of the bars. The biggest increase I've ever seen was 9x.
The lack of economies of scale is one of the other problems facing car pooling and other vehicle-based market economy services. Insurance costs do not decrease with volume. More rides, more insurance costs. The same is true for the driver. The pay per minute and mile of drivers does not improve with more trips. No driver will give Uber or Lyft a volume reduction, especially when the salary is already so low.
This could turn out to be a mixed bag for them. Tesla Network will not have a driver problem, but Model 3 owners will expect Tesla to pay for the kilometers traveled. This rate will not improve with the scale. Tesla could perhaps find a solution to the insurance problem, not the scale. If they can prove that their technology is much safer than the competition, they may be able to charge lower premiums.
From the landlord's point of view, a number of factors will affect the revenue from his vehicles on the Tesla network.
The location is going to be a big one. Larger cities with more demand will have higher rates charged to passengers. This can lead to wage differences between cities, as is the case for carpooling drivers. If this is the case, an owner might realize that it is better to leave the car (s) in a cheaper market that pays more.
The times of availability of the car will also be important. I do not know if Tesla Network will have on-demand pricing like Uber's "hike" or Lyft's "PrimeTime", but if there is one, it may be more profitable for some owners than for others . If you always use the car during rush hours, you may be less profitable than the other owners who let it work during this period. If you are concerned that people are vomiting in your car, you may decide not to let it work on the weekend nights, but you can miss the best value, especially when closing bars.
There is also the issue of downtime after damage / damage caused by passengers. If, for example, a passenger vomits at 2:10 am on Sunday morning after being evicted from the local bar and this happens in your vehicle, will he be compensated by Tesla or simply clean it up and put it back in? at work? Keep in mind that the vehicle will be out of service from 2:15 to 3:00 or 4:00 am and that it will not collect revenue from rush hour. The way Tesla handles this situation will matter a lot.
There are many other things I could tell about earning money by giving people walks, but what is more important here is that many factors will affect your income if you own Tesla and you send the car to you. It is helpful to know these challenges in advance. You may want to talk to taxi drivers and local carpoolers, and maybe do some carpool yourself to familiarize yourself with the business before you send the car.
Last thoughts
The bottom line here is that Tesla Network is not entering a new industry, but Tesla could transform it decisively. How they modify the factors that affect income will matter.
It is also true that some of the existing carpool and taxi challenges will be reflected in the Tesla Network business model. A savvy homeowner trying to earn money in this area needs to know what factors affect his income and play smartly to maximize his income.
Whatever the case may be, the potential is huge and there will be winners and losers.
About the author
Jennifer Sensiba Jennifer Sensiba is a longtime vehicle enthusiast, writer and photographer. She grew up around a transmission workshop and experimented with vehicle efficiency since the age of 16 and drove a Pontiac Fiero. She enjoys exploring the southwestern United States with her partner, children and animals.
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