Robot gig economy: Will it pay for Tesla owners?
April 21, 2019 by Jennifer Sensiba
Tesla takes bold steps towards launching the Tesla network, an uber-like transport service where a self-propelled Tesla will give you a ride. New research suggests that this can make big money for not only Tesla, but also Tesla owners who are willing to let the car join the network while not using it. But will it be profitable for owners who do this?
Numbers Look Pretty Sweet …
I start by pointing readers to my latest article on Tesla's last move . In short, they are self-confident enough in their self-propelled technology that they are willing to invest heavily in the technology being ready to run completely unattended within 3 years. That's a pretty big thing.
If you own a model 3 or are considering one, this becomes an increasingly important part of the plans for future ownership. Cathie Wood, founder of ARK Invest, says her group's surveys indicate that Tesla owners will make a minimum of $ 10,000 per year who participate fully in the Tesla network. For a car that costs around $ 45,000 (basic model 3 with FSD), which makes the difference between the car being a depreciated asset and an actual investment that goes out and earns it when you sleep.
Another factor that can sweeten the pot much more is the model 3's lifetime. Few have driven Teslas around transporting passengers more than Tesloop, and they have shared their experiences and opinions on this . Not only does the car last long, but the total cost per kilometer plummet with the much longer lifespan that the Tesla vehicles have shown. People participating in the network can make murder over time.
If the ARK Invest and the Tesloop numbers show up correctly, a Tesla in the Tesla network should be able to make the owner tens of thousands of dollars before going to the recirculators, provided the car does the estimated minimum. Some owners can do a little more than the minimum, which makes a model 3 an attractive investment.
Healthy skepticism

A screenshot from Uber's registration page.
Before anyone (mostly right) calls me a Tesla cheerleader, I would point out that I have heard all these arguments before.
"Make hundreds of dollars at leisure!"
"Be your own boss! Set your own schedule!"
"Earn as much as you want!"
Rideshare and shipping companies make some pretty bold, but deliberately vague, promising to recruit drivers. In the face of a floating local photography business and a need to fill the gaps in 2017, I decided to give the "gig economy" a chance. There were times when it worked OK and brought in part-time money. Later I found myself doing it more and more, but when I went from little part-time work to more of what ordinary people would consider a full-time job, the more it became clear that this is not something that continues to pay well in off-peak hours .
I fell into a trap that many fell into. The first "toe pipe" feels good with it, so you decide to enter, but then you find that the water is not the same as it was on the surface. 8 hours becomes 12, then it becomes 16, and then you just work until you drop, sleep a little, and work with a little more. You put emphasis, spend hours sitting in parking lots near airports, and desperately hunting every little event in town. Pay drops, then fall again.
I have no reason to believe that the Tesla network will turn out to be the "gig economy" for many people, but I have reason to be very skeptical about it and take care of the signs that it does the same, and to take care of signs that it is different.
The Competitive Landscape Matters
One of the most important things to look for is the competitive landscape. Uber was good for the drivers first, who was lifting. Engineers and even lawyers left their jobs and paved the way for wages in some cities. And then started the race to the bottom . With little to stand out, the services came into a price war that is still happening today. They dropped prizes under any hope of winning themselves, hoping to run out of investment money later than their opponent and then take over the market. As it didn't work, they improved the "improved" driver repeatedly to try to hide the salary reductions from the driver who took it to keep the prices down.
I can't tell you in this article if Tesla's competition would force them into such a situation, but I can give a quick overview of the competition in the market they would be up against. Although some of this comes from my own experiences and observations, The Economist does a pretty good job summary in depth.
First, it's Waymo. Formerly a subsidiary of Google and Alphabet, the company already provides rides in Arizona. They face challenges, such as violent attacks, but also encounter some with vehicles that do not do everything on their own. There is a person in the car as a backup, and the passengers have had to sign an NDA to get rides from the service.
GM has a fleet of self-propelled variants of the Chevrolet Bolt that they use to create a driverless service. I've seen these tests on Arizona's streets as well.
Both Uber and Lyft are eager to get into the driver without a taxi. Obviously, their interest is to cut the drivers all the way out to keep their run to the bottom, at least for now. Neither has it been much success, and Uber took a lot of heat after an inattentive test driver chose to watch reality TV instead of the road while the emergency brake system was disabled.
There are dozens of other small players, each with their own slightly different approaches, but at the end of the day, the bottom line is that there is plenty of competition out there and trying to enter the driver-free taxi market
If Tesla Going without a competitive advantage, they eventually come to points where they are also in the race to the bottom. This can only continue until investors become wise to the endless cash burn, and the races come to a negative end. But unlike today's ridesharing with the same drivers and the same cars that do the same work, it is far from clear at this point if any of the players will get it right and if such a run to the bottom can develop at all taken.
To do this, Tesla must start with a clear advantage and keep it beneficial for years. The Tesloop founders seem to think that Tesla's technology will dominate the others and do so. Other researchers also say so.
As I pointed out in a previous article Elon Musk feels very confident about this. He believes that Autopilot and Full Self Driving are already better than the others and are improving much faster than the competition. Tesla already gathers far more data from human drivers, autopilot shutdowns and many other things through the car's LTE connections. Other competitors don't seem to be close right now.
This problem, and the technological advantages that make Tesla apart, will be a major part of Elon Musk's presentation on the 22nd. If you are considering using Full Self Driving as a moneymaker or additional income in the future, you will see what he has to say and whether the technology will keep the Tesla Network out of a race to the bottom. [19659005] Other Challenges and Factors to Consider
A screenshot of the Uber Driver app, which shows salaries, is 2.1 times higher just after the bars are closed. The biggest wave I have ever seen was 9x. One of the other challenges that rideshare and other car-based gig finance services face is the lack of economies of scale. Insurance costs do not go down with volume. More tours, more insurance costs. The same goes for the driver's salary. The per-minute and per-mile salary for drivers does not improve with multiple trips. No driver should give Uber or Lift a volume discount, especially when the payment is already so low. This may prove to be a mixed bag for them. The Tesla Network will not have the driver problem, but Model 3 owners will expect Tesla to pay for their spent miles. That speed won't get better with the scale. Tesla may have a way out of the problem of insurance not scaling. If they can prove that the technology is massively safer than their competitors, they may require lower premiums. From the owner's perspective, there are a number of factors that will affect the income from cars lent to the Tesla Network. [19659009] The place will be a great one. Larger cities with higher demand will have higher rates charged to passengers. This can lead to different pay in different cities as it does for rideshare drivers. If so, an owner may find that they are better off leaving the car / car in a better market that makes more money. Times of car availability will also be large. I don't know if the Tesla Network will have demand prices like Uber's "Wave" or Lift's "PrimeTime", but if it is, it may be more profitable for some owners than others. If you always use the car during peak shuttle times, you can make less money than other owners who let the car go to work during that time. If you are swallowing people throwing up in your car, you can decide not to leave the car on weekend nights, but you can miss the best money, especially when the bars close. There are also questions about downtime after injury / fairs caused by passengers. For example, if a passenger throws up at 2:10 am Sunday morning after being kicked out of the local bar and this happens in the vehicle, you will be compensated for this by Tesla, or will they just clean up and return it to job? Keep in mind that the vehicle is out of service from 9 am 02.15 to 11.00 3am or 3pm 4:00 am and miss the revenue from the peak hours. How Tesla handles that situation will be important in great ways. There are many other things I could relay about making money that gives people rides, but my biggest point is that there are many factors that will affect your income if you are a Tesla owner sending the car out to work for you. It is worth knowing about these challenges in advance. You might want to talk to local rideshare and taxi drivers, and maybe even make a little rideshare yourself to get hold of the business before sending the car out. The key here is that Tesla Network will not enter a new industry, but Tesla can change it in great ways. How they change the factors that affect revenue will matter. It is also true that some existing challenges in the rideshare and taxi world will translate into Tesla Network's business model. A wise owner trying to make money from this needs to know which factors affect their income from it and play the game smartly to maximum income. Anyway, there is great potential, and there will be winners and losers.
Final Thoughts