The Future of Robotaxis (yes… Robotaxis)

DISCLAIMER: For those of you who didn’t really find my last post on the Tesla Safety Score interesting, this blog might not be for you… Today I’m going to dig deeper into another one of the numerous Tesla digital innovation rabbit holes- the possibility of a fleet of Tesla Robotaxis in the “near” future.

As I mentioned in class, I was lucky enough to get a Model Y last year and have been enamored with their continual innovation and ambition ever since I joined the community. While they do have their major issues (customer service, quality control, lack of full road coverage via superchargers), I would venture to guess that one reason for these issues going unresolved is the effort and resources they are expending in other areas. A great example is Sentry Mode. This feature has been around for at least a few years, but last month Tesla unexpectedly added the ability to view live feeds from your cameras while the car is parked. Now it could be argued that this feature should have been available at launch, but its value is undeniable; the sense of security that comes with having a constant video feed available on your phone from your car can’t be overstated. And that’s just one example of Tesla rolling out desired features in an agile manner after launch.

live sentry
Tesla Sentry Mode Live Camera Feeds

Their most ambitious feature yet to come must be the ability to utilize your Tesla as a Robotaxi. But what exactly does that mean?

At Tesla’s 2019 “Autonomous Day” Elon Musk stated that he envisioned genuine self-driven cars, capable of picking up passengers with no-one inside, and deliver them to a pre-selected location (think Uber sans annoying driver who won’t stop trying to talk to you about the weather or their own problems) … within a year. Now obviously we are well past 2020 and have yet to even see Robotaxis in action, but the underlying foundation for its eventual launch is still well underway.

As Tesla followers have come to expect, any feature rollout regarding Full Self Drive has been subject to at least a 6-12 month delay from what Elon promised on Twitter. His ambition to push the world towards autonomous streets is obvious, but the state and federal road regulations to abide by and sheer logic needed for robust autonomous driving neural networks has massively complicated any feature trying to get to production.

In terms of actual functionality, here is what we currently know about the “Robotaxi” plans for Tesla. The overall plan from a vehicle owner’s perspective is to be able to sign your car up as an available vehicle in the “fleet” that will fulfill rideshare stops, just like Uber and Lyft but without a driver. As a rideshare customer you would simply request a ride to a destination via an Uber-style Tesla app, and an autonomous vehicle in their “fleet” that is accepting rides at the time would drive itself to the customer to pick them up and deliver them to their desired location. These vehicles have even been primed for this from a hardware perspective for a while now. Every new Tesla has a cabin-facing camera, which Elon states will enable Robotaxi owners to be able to check in on rideshare activities in their car and have video evidence if anything does go wrong during the ride.

So, the timeline has been blown out of the water at this point… is the project in jeopardy after failing to launch well past Elon’s initial deadline? Absolutely not. As recently as January, Elon highlighted Robotaxi’s importance for the future of Tesla. His main argument points towards how this feature justifies their $1T valuation, because these vehicles’ usage would go from an average of 12 hours of weekly use to potentially 60 hours a week. That would result in specific Robotaxi revenue per car, and as CNBC puts it “basically, it would be like bringing software economics to the manufacturing-intensive car business”.

The biggest Robotaxi hurdle, however, is getting a fully autonomous version of Full Self Drive out to customers, as that technology will be the backbone to this autonomous rideshare service. As mentioned with the Safety Score, Tesla is slowly rolling out the beta for what is expected to be a major FSD overhaul. If this version of the AV neural network is as all-encompassing as promised, it could provide what is needed to start rolling out early Robotaxi beta programs shortly thereafter. Being so important to maintaining their high valuation, I expect more updates on this initiative to start popping up closer to the end of 2022, given the impact COVID has had on the car manufacturing industry as a whole. But even with a longer than expected delay… the future of AV ride-sharing will make it to market one of these days. And that is worth dancing for (if you’re going to make as much money off Robotaxis as Elon Musk).

Sources:

Sentry Mode Live Camera Access in action [Video]

https://www.fastcompany.com/90677822/elon-musks-tesla-robotaxi-promise-typifies-self-driving-overexuberance

https://www.cnbc.com/2021/01/27/elon-musk-explains-how-self-driving-robotaxis-justify-tesla-valuation.html

https://www.caranddriver.com/news/a32159871/tesla-robo-taxis-still-coming-2020/

6 comments

  1. I confess that I’ve spent alot of time thinking about the business model of a robo taxi. Would the cars be owned by Tesla? That seems to be a huge operational and financial feat. I actually wonder if what used to be auto dealers now become the new local taxi fleets, because they can service and manage them.

    1. Bryan Glick · ·

      I remember reading an article a while back that the main driver of the program would be financial incentive for existing owners. So Tesla owners that sign their vehicle up would be responsible for any normal wear and tear on the vehicle. That said, it would still take an Uber level organization to run an entire ride-share operation to handle the complexities of that type of business model. If it ever does come to fruition, it will be interesting to see if those hurdles lead into the market consisting of auto dealers capable of handling the majority of the operation outside of Tesla.

  2. shanpopzaruba · ·

    I am excited for the minor inconveniences this service could offer, like minimizing cancellations, less missed turns (hopefully), and more accurate wait/pick up times. However, do you think the price point would be around that offered for other ride share services? I think once the initial novelty wears off, I would imagine cost would be the prohibitive factor in the upkeep of this success of this industry.

    Also, the idea of being able to fit an additional person in the car (no driver = one more passenger) without needing to wait for an Uber XL will be incredible for bachelorette parties everywhere.

  3. While I am very excited for this day, I can only imagine the amount of backlash Tesla will get for “taking jobs.” Uber was once the evil company that destroyed the taxi economy. Now, many of those taxi drivers have accepted the medallion sunk cost and become successful Uber drivers. How will the industry react to removing humans from the equation overall? I don’t think Tesla should slow their roll, but they should prep for lobbyist pushback.

    Another great blog! Nicely done.

  4. Carlos Montero · ·

    Great blog Bryan! I am also a big Tesla fun too. but I also think that one of the biggest hurdles for the taxi industry are all the taxi union and city regulations. Also other concern is if the Teslas brand can lose value, because the public starts associating Teslas with a cheap and common car.

  5. DownEastDigital · ·

    There’s no doubt in my mind that eventually, we’ll have robo taxis, just a matter of how soon. I think Professor Kane’s comment that mentioned car dealerships is a fascinating one. The idea that anyone not suing their car could profit from this as well is incredible. I can definitely see the day when highways have a designated lane for autonomous vehicles, which could greatly reduce traffic. I also hope to commute via a service like this someday, whether it’s directly to my office or to a train station in a ride that’s shared with others. Certainly, some serious regulations and stipulations to iron out first, but this is a natural next step as our society evolves into more of a network of distributed trust.

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