How Tesla's Positioned to Win the Robotaxi Market By 2030 Over Waymo, Zoox, Cruise, Uber, and Lyft

Why is Tesla's coming Robotaxi such a big deal?

Uber was partially invented right in front of me in a Paris snowstorm by Garrett Camp and Travis Kalanick. That set me on a path of understanding Transportation as a Service, which really is what Uber is. You order a ride on a computer, usually your phone, and one arrives. If I want to take one to San Francisco Airport it usually costs around $70 for an hour drive from my home in San Jose. Uber grew from that Paris snowstorm to being in many countries within three years. Uber is, so far, human driven. Humans have some advantages, they come with their own cars, so Uber didn't need to take on any inventory risk.

But they come with many disadvantages too. Some talk too much. Some smell. Even of weed. Some arrive inebriated. Some abuse their riders, or worse. Yes, most of the time a great human shows up with a new model car that's well maintained and clean, but use Uber all around the world, like I have, and you'll hit these problems. Inconsistencies.

And notice we haven't talked about how much the human costs, either in dollars (minimum wage is about $20 in California) or in safety costs (human tragedy in cars is pretty frequent, with around 40,000 deaths in USA every year alone). While a new Tesla costs about $3 to sit in your driveway every hour, add a human and the cost runs much more. Go back to Elon's first sales pitch (he gave it to me personally at the beginning) and he talked about beating legacy auto on price and experience. He's been planning Robotaxi since before the Model 3 shipped in 2017. How do I know that? Because only his cars have electric vents, something that still gets him derided. Mercedes engineers told me personally ts customers hated electric vents, and that they wanted knobs instead.

But it is the electric vents that will give you a better experience, along with a number of other things, including a better audio system than the others have.

But compared to the others it will have a better brand due to this focus on experience and consistency. What makes a great brand? Not, necessarily having the best product. Starbucks, for instance, doesn't, and I can find you better things to drink than Coke, but those two are great brands because they are consistent and ubiquitous. So, why does Tesla matter here? What about Waymo, Zoox, Cruise, or a handful of other potential Robotaxi competitors? What is its moat? Years ago I did consumer research, going around America asking people "are you willing to get into a vehicle that has no steering wheel?" Most answered "f**k no." I have studied several technological paradigm shifts and heard protests every time, but this was the most adamant of my career. I was talking about this with Peter Norvig, who used to play a key role at Google R&D and claims he is the guy who got the funding to start its autonomous vehicle project, about this. He told me Google already had the data to know that after three rides in a Waymo they will deeply trust autonomous vehicles to the point that they will want to use them for every ride.

It is this key point "use them for every ride" that gets execs and investors interested in autonomous vehicles. I've heard this too from many San Francisco residents who love Waymo's service of being able to hop into an autonomous vehicle. But why does Tesla matter? Tesla's AI started out behind Waymo/Google's but has been learning faster. I believe that it is already better than Waymo at generalization (Waymo is only available in a few cities while my Tesla drove me 900 miles to Sun Valley from my home in San Jose). Yaman had an excellent show with Omar of Whole Mars Catalog that everyone should watch that compares Waymo and Tesla. Already Tesla's AI is smoother in many places.

Back to the point. If you arrive in Las Vegas for a conference or on vacation which one do you choose to use? Tesla? Waymo? Zoox? Cruise? Uber? Lyft? Or some other brand or taxi?

My prediction is that Tesla will win most of this business in 2030. Why? Experience.

• Being in a Tesla vehicle is safer in a crash than the vehicles that the other companies use.

• Being in a Tesla will have a better experience, from the vents to the sound system.

• Using a Tesla will be more consistent. Everyone knows what ordering a Cybertruck will do. Taxis and Uber always shows up with different vehicles so won't be as consistent. Starbucks shows that people will choose a consistent product over one that's better quality, but isn't as consistent.

  
  

But it is the fleet size that really matters.

When I interviewed Travis Kalanick, Uber's founder, in front of Stanford Business School, he told me that he had one big goal: to have a vehicle near you so that when you ordered one, it only took a few minutes to show up. If three vehicles were waiting nearby then the drivers weren't being used efficiently, pissing them off for not getting paid. If none are nearby then it takes too long for a vehicle to get to you. So who has the biggest fleet? Of autonomous vehicles? None of them other than Tesla is on my street and on my street there are 13 Teslas already. So many that I can walk to another Tesla in seconds. Faster than I could get one in San Francisco. It wouldn't even need to drive to me!

The fleet size matters in many other ways, particularly experience. Why? Well, let's say there are a bunch of Teslas on the road in front of you. They can "see" all sorts of things, from fires, to protests, to police actions, and can report those to the control system that runs the network. So it could route around problems faster than any other network. That makes the experience better. If you can see that it has real-time info, you will learn to trust the one that has the real-time info on the screen more than one that doesn't have as much info. Which gets us to another thing. All us Tesla owners have its app running on our phones. That could feed a lot of new data into the network, like about how busy a nightclub or a restaurant is. Or details about a news event. Literally none of us have a Waymo app on our phones. Most humans haven't even heard of, or seen, a Waymo. Uber? Sure! But it comes with a human which brings the above problems and a higher price. Speaking of price. A Waymo has quite a few expensive LiDARs and more compute on board than Tesla does to handle both camera feeds and LiDAR feeds. Tesla has gone with a camera only approach, which is not only cheaper per vehicle, but looks a lot nicer too and can be hidden inside a standard-looking vehicle. Waymo's have gotten vandalized several times because they are the symbols of a new, dystopian, age, as one of my friends put it. Tesla's just are everywhere in many cities, especially anyone near San Francisco so won't attract the same kind of attention. So, my predictions: By 2030: Tesla robotaxi will be cheaper than other networks.

Tesla will have a better screen and audio system for you to use. Movies, education, music, video conference calls, etc, will be better in a Tesla and more consistent. Tesla will be safer, and go more places. Tesla's route picker will be way better. Especially around massive events like concerts, sporting events, and more. Tesla's vents, seats, mirrors, audio level, are automatically set to personalize to you. Tesla's app and vehicles gives you more details, which leads to a better experience "there's a 14-minute line at the McDonalds."

Let's put it bluntly: Tesla's customer acquisition cost will be nearly zero, while Waymo or Zoox will need to spend a lot more to create both awareness and behavior. I don't think they will be able to convince a Tesla user to switch to their platforms given the better experience and lower price I'm expecting Tesla to have. To wrap it up, for now, let's say you want to take your lover to a downtown for a date night. In an Uber there is a driver taking up one of the two best seats. In a Tesla? Nope. So date night is way better. On Thursday night we'll see just how much better.