Ark Invest analyst Sam Korus took to X last week to dispute claims that Tesla Inc.’s TSLA vision for operating a fleet of autonomous vehicles will likely not work.
What Happened: Tesla CEO Elon Musk expects his company’s robotaxi fleet to function like a combination of Airbnb and Uber. While a certain portion of the fleet will be owned by Tesla, individual customers can also add or subtract their vehicles to the robotaxi fleet at will.
As for riders, they can summon a car using the Tesla App, Musk said during the company's second-quarter earnings call last month.
However, not a lot of people are convinced about the functionality of this model, including Uber CEO Dara Khosrowshahi who flagged concerns including whether a car owner is going to want their car to be ridden in by a complete stranger. He also flagged other concerns including trouble in meeting demand as individual drivers might want their vehicles at the same hour as when demand peaks.
But Ark’s Korus does not share these concerns.
“The demand is there if you offer rides at a given price and a quick pickup time. Robotaxi solves the driver side of the equation, which is the hard and costly part,” he said.
Some drivers drive for Uber and Lyft without getting paid very much and would like to earn money without sitting in the car, he said, disputing concerns of people not wanting to give up their vehicles to the robotaxi fleet.
Incentivizing drivers to put their cars on the robotaxi network during periods of peak demand will ensure enough supply when demand peaks, he added.
“Generally I think that people underestimate the operational complexity of Uber’s model relative to Tesla’s positioning,” Ark Venture Investment Chief Futurist Brett Winton added to Korus’ ideas.
Uber’s on-ground operations, including driver recruitment, are costly and labor intensive, and Tesla conceptually has a much lighter lift, Winton said.
Tesla CEO Elon Musk is seemingly in agreement with the experts at Ark as he replied, “Yeah.”
Why It Matters: Uber CEO expressed doubts about the practicality of Musk’s robotaxi vision on an episode of The Logan Bartlett Show earlier this month.
Building cars and operating a taxi fleet are "very very different" businesses, Khosrowshahi then said. While running a fleet, the company has to match people with their rides, and price the rides economically while also addressing other concerns like people getting sick in a car, losing items, or getting involved in accidents, he added.
Autonomous cars in the future will function like food chains such as McDonald's or Starbucks which have a direct channel to consumers and also use third-party channels for the complete utilization of their restaurants, the Uber CEO opined.
"If you want to drive utilization of that asset, you're going to want to engage definitely in third-party and if you want to develop your own first-party channel as well, that can be true. It doesn't have to be either/ or," Khosrowshahi said, while also expressing optimism about a future partnership with Tesla.
Tesla is now expected to unveil its dedicated robotaxi product on Oct.10. The event was initially scheduled for Aug.8 but the company delayed it to make a few important changes aimed at improving the robotaxi and to give itself time to prepare a ‘couple of other things’ to showcase at the event, Musk said in July.
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