Makes sense. Elon Musk says he is a technologist. Musk says he knows a lot about computers. Musk says the last thing he would do is trust a computer program:
So, does that mean that all the Tesla on the roads won't become robotaxis with a simple over the air update ?
But at least, Optimus is still scheduled to start serious work in factory right ? /s
On a more serious note, I don't get why people think robotaxi have such a huge business potential. Robotaxi are certainly the future - that's undenialable. But is it such a good business ?
I don't see many people ditching their cars for a Robotaxi. Those who would, don't own a car anwyay.
As for margins, it seems to me like it will be a race to 0, quite like airlines, with very little profit to be really made.
I think at an even smaller scope than robotaxis, having a really convincing level 4 driver assist (dare I say "full self driving" mode) for general consumer vehicles is a decent value proposition. Both for prospective new car buyers and existing owners. EV adoption has still not reached saturation, so giving some compelling reason to buy a Tesla over another car is pretty big.
After a car rolls off the lot its hard to make money on it. Tesla is in a position to actually make money off this, provided their FSD offering is compelling enough. You can extract decently high margin recurring revenue from potential FSD subscriptions.
And despite their shortcomings, I think they are probably the closest auto OEM to making it happen, and they are clearly taking things pretty seriously (multi billion dollar GPU clusters, paying top dollar for talent, having a massive data edge, etc).
I think Waymo is the superior technology as of now, but in the short - medium term, having a compelling FSD product on a consumer car will probably benefit Tesla quite a lot. I'm not too sure how compelling a fully car-less (i.e people only commute via some company's robotaxi fleet) future is in the medium term though, and its business viability, but it seems like a not-unreasonable north star to work towards.
Do you think that there exists a big-enough market of consumers who will happily pay a recurring subscription for FSD-esque features in their car?
What would be the price point of such a subscription? I struggle to think of a cost that strikes the balance between value for money and me being suspicious of the quality of the service I'm getting. 100s of dollars could easily double or triple the monthly lease/loan which will directly impact the value-prop math we do do in our heads when buying a car. Tens of dollars will immediately make me suspicious of the quality of the service I'm getting.
I'm not so sure about any of this. My feeling is that the majority of consumers will not opt of such a subscription, especially if it's something "I can just do myself for free" (drive my car). I have no data to back this feeling though, so I'm curious to know what others think.
Margins would only be low if there are multiple companies with similarly good software.
But that is usually not what happens in the software space, especially for software that is expensive to build. Google still has its lead. About $200B in search revenue per year and still growing. Google's overall margin is 32% and the search business probably has an even higher margin.
Tesla has a good shot at becoming the first company to have a self-driving software that can run on vision alone.
Come on, it's time to ditch this "vision alone" thing for self-driving cars.
A computer will never be safe with vision only. Things like reflection and false positives will always wreck the statistics of even the perfect AI, there is no way around it. And I'm talking about good weather conditions.
The numbers show it, the few that Tesla releases about FSD are not up to the level with Google. If it was good, Tesla would be transparent with their results.
I think vision some will likely eventually be sufficient for full self driving, but by the time it is vision and LIDAR will be cheap and ubiquitous and downgrading to vision alone will be seen as a cost cutting measure that unnecessarily degrades safety compared to systems with LIDAR as well.
Human have excellent 3d vision, even with one eye. Some ability that only a vision-lidar fusion would match, not vision only.
Human vision isn't just a flat image like a camera render. Distance from an object is not only estimated from using a stereo camera (2 eyes), it is made from constant movemnt from the head, and the ability to rotate the orbit on two axis.
Vision might be viable in an unknown future (which tesla is very good at seliing), but right now it is very dumb to forbid yourself extra data.
ability that only a vision-lidar fusion
would match, not vision only
What would be arguments that back this theory up? Why couldn't an image stream from fixed cameras be enough?
After all, we made machines perform on a superhuman level in many areas already. You could have said "A machine will never be able to move as fast as a human unless it has two legs and feet". But that is not how it turned out.
I remember people saying computers will never beat humans in chess because they don't have intuition.
People who live and/or work in city center where it's near-impossible to park. If the robocab could pick me up, drop me off and find the parking space outside the city center – that'd certainly be a great product.
What is the point of making pretensious snob comments like this?
You are out of touch, less young people have their licenses than ever before. Car ownership, maintenance, and insurance are expensive. There is a huge market for people who would rather hail a robotaxi than buy a car. Companies like uber and lyft wouldn't be generating billions in revenue if that weren't the case.
That's my question - Uber / Lyft generate billions (low tens, not hundreds!) in revenue, and pretty much no profits at all. It doesn't seem like an excellent business at all.
The vision for robotaxis at this stage it pretty obvious and like you say undeniable - the profits though will be mostly there for those with first mover advantage that can make their brand name the verb for driving somewhere.
It didn't take great vision or foresight to see the uber app back in the early 2010's and see how things will play out vis-a-vis getting rid of the driver - and my money is still with them (literaly) from a brand name perspective only.
What does Uber have?
Except exceptional losses in the 50B range?
Like do they have any hardware at all?
The entire Selfdriving/Robotaxi space goes the same way that ASIC miners for bitcoin did - the producers find it most profitable to run it themselves while selling expensive hardware to end users.
> It didn't take great vision or foresight to see the uber app back in the early 2010's and see how things will play out vis-a-vis getting rid of the driver
It's not clear to me. The Uber we have today seems to be paying the third party drivers around cost price per kilometer, and doesn't have to allocate capital for purchasing vehicles, nor for cleaning or maintaining those vehicles. An Uber that had to buy a bunch of self-driving vehicles that they would also then have to maintain, clean, and service, seems like a worse, more risky, business than what they are running today.
They will surely find a way to make that into a "gig job" too. Like the guys who currently pick up e-scooters, drive them away using various conveyances, charge them and drop them off again - maybe robotaxis can drive themselves to a charging station, but cleaning them will surely still be a gig job.
Wait why "obviously"? Is this like how "obviously" the friends you have in an MLM scam must be making money? Or "obviously" Wall Street wasn't packaging dogshit "no job, no proof of income" mortgages as triple-A securities before the crash?
If by "obviously" you only mean "That seems dumb" then, yeah, welcome to planet Earth.
It's going to trigger a race to the bottom I think. Robotaxi is going to run into exactly the same challenges that Uber experienced back in the day: significant push-back from existing taxy industries.
In markets where they are allowed to operate they will compete directly with Uber which will probably drive down initial cost (consumers win), but the inevitable enshittification will no doubt take place, just making both options terrible.
The existing taxi industry has largely been crushed by Uber, while Uber would love nothing more than to get rid of pesky "driver-partners" who have the effrontery to demand annoying and expensive things like fair working conditions and health insurance. And this isn't just speculation, Uber has already announced a partnership with Waymo rolling out from 2025.
> The existing taxi industry has largely been crushed by Uber
I have limited experience, but my two data points:
In South Africa Uber and the existing taxi industry operate on two completely separate and non-mixing markets. Even though Uber (and similar services) is getting a lot of abuse from the taxi industry, I don't think the taxi industry has really been affected by Uber at all.
In Ireland Uber is basically non-existent. Only sanctioned taxi drivers are allowed to be drivers on Uber. So they are basically just regular taxi drivers who happen to be drivers on the Uber app. It's actually really difficult to get an Uber where I am, there's only like one or two of the taxi drivers who are actually on the app.
I have extensive experience, and the only other country I can think of where ridesharing apps are straight up banned is Mongolia. The last major holdout was Japan, which until recently only allowed licensed taxis to be hailed, but they've started experimenting with liberalization as well.
Uber's own stats are 9.4 billion trips across 161 million users in 2023, and this excludes those markets where it has withdrawn in favor of other rideshare providers (Didi, Bolt, Grab, Yandex, Careem, etc).
It's a great business. It's like Uber (which is worth $150 billion), but with 3x less costs. Taxi services are network effects that are extremely difficult to compete with, which is why the taxi industry is basically a duopoly now.
It's much higher cost. Currently drivers own the cars and therefore taxi companies get that capital for free. Self-driving taxi companies will have huge capital costs because they'll have to buy (or lease) the cars.
How will operating cost be 3x less compared to Uber?
Uber drivers are already low-wage earners in many instances, moving them all to a tele operator centre in a 3rd world country will not make that much of a difference I think. I also suspect the cars will be significantly more expensive compared to the typical Corrola or similar shitbox that Uber drivers prefer. And this cost won't be foisted on the driver, and will be a direct capex for Robotaxi. Charging, charging infra, maintenance and all that will also be a running cost that Uber does not have deal with.
How exactly is it 3x less costs? Uber drivers' margin is extremely low, it varies a bit between countries but after energy costs, maintenance/upkeep costs, vehicle acquisition cost and depreciation, etc. their take home pay is low. Pluck the driver out and you still have a car that needs maintenance and energy to run and savings are on the labour cost which Uber already pushed down as much as possible.
I don't see anywhere a way to get 3x less costs in this equation.
How does it compare to a car sharing company? It has all the same costs for the vehicle and the driver/pilot is free in both models, in one it is AI and the other it is just the user.
https://youtu.be/040ejWnFkj0
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