Tesla (TSLA) CEO Elon Musk has big dreams for the future of taxis, but apparently, not everyone in the ride-sharing industry sees his vision.
After Musk recently revealed that Tesla is close to unveiling its fleet of self-driving vehicles called robotaxis, which is set to be a major competitor of ridesharing apps such as Uber and Lyft, Uber CEO Dara Khosrowshahi says he is skeptical of the initiative.
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In the latest podcast episode of “The Logan Bartlett Show,” Khosrowshahi claimed that Tesla’s robotaxi plan, which will allow Tesla owners to rent out their vehicles to be used as driverless taxis for a profit, may not get the thumbs up from Tesla owners.
He said that it is “not clear” to him that the average Tesla owner will want to have their car “be ridden in by a complete stranger.”
He also stated that allowing Tesla owners to rent out their cars for taxi services will make it difficult to manage the “peaks and valleys” associated with supply and demand.
“It just so happens that probably the times at which you’re going to want your Tesla are probably going to be the same times that ridership is going to be at a peak,” said Khosrowshahi.
Dara Khosrowshahi, March 11, 2024, in Austin, Texas.
Samantha Burkardt/Getty Images
Khosrowshahi also revealed during the interview that he is skeptical about society’s acceptance of driverless vehicles due to worries about safety, and how people are more accepting of mistakes from human drivers than robots, which can pose a challenge for robotaxis.
“Logic would dictate that if robots are twice as good a driver or three times as good as drivers as humans, that’s good for society going forward, but I honestly don’t know if society’s ready to accept that,” said Khosrowshahi.
The CEO also highlighted that the rideshare industry is “very” different from the business of building vehicles, which Tesla has expertise in, and that a lot can go wrong such as car accidents, passengers getting sick or losing items in cars, or wanting to pay in cash.
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He said Uber has already figured out how to manage these challenges and hopes to partner with Tesla in the future to develop a rideshare service.
“We’ve had to learn to build out a system that’s able to make everything work for both the rider and the driver with economics that work,” said Khosrowshahi. “It’s taken us 15 years, it’s taken us tens of billions of dollars of capital, and we can provide that instantly to a partner, and hopefully, Tesla will be one of those partners, you never know.”
Tesla’s robotaxi faces delays
The criticism from Khosrowshahi comes after Musk revealed in a post on X on July 15 that the unveiling of Tesla’s robotaxi vehicle will be delayed due to an “important design change” after it was initially expected on Aug. 8. The vehicle will reportedly make its debut sometime in October.
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During Tesla’s earnings call on July 24, Musk said that its robotaxi service, which will be available through the Tesla app, will be equivalent to an “Airbnb on wheels,” as the fleet will consist of both Tesla-owned robotaxis and vehicles from Tesla owners who choose to participate in the program.
“So you can think of that as being a bit like Airbnb, like you can choose to allow your car to be used by the fleet or cancel that and bring it back,” said Musk. “It will be used by the fleet all the time, can be used by the fleet some of the time and then Tesla will take a share in the revenue with the customer.”
Musk also claimed that Tesla’s first robotaxi will “be able to operate 24/7 unlike the human drivers” and could “possibly” be on the road by the end of this year.
“I would be shocked if we cannot do it next year,” said Musk.
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