Elon Musk’s latest announcement has teased the idea of “robotaxis” by 2020, something that many companies have been fervently aspiring to but haven’t made concrete plans regarding.
Musk’s announcement made waves throughout the industry, not only because it’s an interesting direction for Tesla, but also because of the extensiveness of the claims and the likelihood of upsetting the competition.
According to Musk, if you fast forward a year, or “a year and three months,” the company will have over a million autonomous vehicles operating on the road. That’s a pretty bold claim for a few reasons. One, it’s a larger claim than even companies such as Uber and Lyft have levied, and these ride share services have been chasing autonomous driving cars for some time.
Lyft and Uber already have self-driving taxis on the road, and Uber has been reportedly burning $20 million a month in development. But it’s not just a question of competition (after all, a partnership between Tesla and one of these ride share companies could also be in the works), it’s a question of regulation and law. Regulations have been slow to adapt to self-driving cars for many reasons.
One of the major questions is how self-driving vehicles would be able to make a decision in an accident: if confronted by two pedestrians, does it “choose” who to hit? On a technical side, it really isn’t much of a question at all: self-driving vehicles will likely be programmed to avoid the decision entirely by always trying to “avoid” both accidents through braking, rather than choosing to swerve into a single person.
On a legal side, it’s more complex, because the laws move more slowly, and because the regulators must also understand the technology. With a proposed fleet of a million vehicles, Musk isn’t just banking on having those technological capabilities, but also having the force to push through regulations and laws and start using them en masse.
Musk has, in the past, named some lofty goals and deadlines and failed to achieve them. However, he’s always worked towards them. While autonomous taxis may not be in the works for 2020, it’s likely that they are a significant of Tesla’s goals. It was always known that Tesla’s autonomous technology was one of the most advanced, in fact, many of the cars being produced by Tesla today could be called autonomous driving cars.
It’s the dedication towards an autonomous taxi service and his deadlines that are surprising, as before he had not claimed that he was going to be aggressively moving into the taxi space. Where he moves in the taxi space could have some serious consequences for Lyft and Uber, with Lyft having just had its IPO, and Uber barreling towards it.
With Uber bleeding such a substantial amount of money towards the pursuit of autonomous cars (and Tesla already being essentially there) it does mean that there is now a new contender for the taxi disruption throne. While Tesla doesn’t have the market share in ride sharing the way that Uber and Lyft does, it’s difficult to see a world in which most ride share passengers wouldn’t be willing to download another app, especially from a company as well-known as Tesla.
Musk can come off to many analysts and investors as a starry eyed dreamer, but it’s inarguable that he’s an effective one. For the most part, Musk has shown a willingness to barrel his way through just about anything, and revolutionizing the ride share and taxi industry may very well be the next thing he does. Musk’s dedication has always been to helping people and the environment through technology, and while his pursuits may be controversial, creating a cheap, energy-efficient taxi service is well on the way to doing so.
Investors in Lyft and Uber, meanwhile, may want to watch out, because the competition just got fiercer. With both IPOs occurring this year, it could be a bad time for investors.
Regards,
Ethan Warrick
Editor
Wealth Authority
