This is an announcement-disguised warning to the existing players

Despite all the controversy, things seem to be going well for Tesla. A couple of days back, CEO Elon Musk announced that Tesla has achieved a $312 million profit in the third quarter of 2018 - only the third time it has achieved a quarterly profit in its history of 15 years. However, this was not the only announcement made in the meeting. Musk spoke about Tesla Network – an upcoming self-driving ride-hailing service that could pose a serious threat to Uber and Lyft.

A Culmination Of Innovations

In the Not-So-Distant Future, Tesla Might Take on Uber and Lyft
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Musk believes that Tesla can give strong competition to rivals like Uber and Lyft, thanks to its Autopilot neural net leading to fully self-driving capability in the near future. Tesla has been working rigorously on its neural net.

Tesla software version 9 along seems to come with a whole lot of new capabilities.

The neural net computer is expected to be here by early 2019; so, expect the Tesla Network to be launched as soon self-driving cars are allowed on the road unsupervised.

What The Man Had To Say

In the Not-So-Distant Future, Tesla Might Take on Uber and Lyft
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During the earnings conference call earlier this week, Musk said, “We absolutely see the future as kind of a shared electric autonomy, so that you’d be able to do ride-hailing or share the car anyway, you know sort of a long-term model that’s probably some combination of like Uber, Lyft and Airbnb.

There will be Tesla dedicated cars for ride-hailing, and any customer will be able to share their car at will, just like you share your house on Airbnb.

So, it’s a combination of those two models, I think is pretty obvious where things are headed long-term. The advantage that Tesla will have is that we’ll have millions of cars in the field with full autonomy capability and no one else will have that. So I think that will end up putting us in the strongest competitive position long-term.”

Tesla already has thousands of those vehicles on the road, and by the time the Level 5 autonomy is enabled, Tesla could have millions of cars on the road. Given how Tesla operates, it looks like all cars manufactured since October 2016 will be able to become fully autonomous. Not just this, but Tesla will also be splitting this between company-owned vehicles on the Tesla Network and revenue sharing for customer vehicles.

Elaborating on this, Musk said, “The company-owned fleet will just be where there aren’t enough customer cars to be loaned out.

So if we find a particular metro where there aren’t enough customers who are loaning cars to the shared fleet, then that’s where we will supplement with a Tesla own fleet.

So that’s why it sorts of a combination of Uber and Airbnb. And then we charge something probably comparable to yeah [Apple App store], or I don’t know we charge 30% or something in order for somebody to add the cars to fleet. I think that’s like a pretty sensible way to go.”

Our Take

In the Not-So-Distant Future, Tesla Might Take on Uber and Lyft
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Although Musk has a Midas touch, it won’t be easy for Tesla to dominate the ride-hailing space.

If seen from a long-term perspective, Tesla is expecting to give stiff competition based on full autonomy; and we have no idea when the U.S. will allow Level 5 autonomy.

However, Tesla believes it can claim its space, thanks to their Neural Net vision and learning technology. As far as expert opinions are concerned, that could still be a good decade away.

But, Tesla has done such turn-arounds before (read: Spacex) If their approach and vision goes as per the automaker’s plan, Uber is in deep trouble. If successful, this will be nothing short of a revolutionary transformation, because Uber is a nothing but a mediator between users and drivers, whereas Tesla would already have its own drivers. And, if users want to hire a car, that would be cheap as the fleet will be filled with only electric and autonomous cars.

Do you think the future is as close as Musk claims it to be? Share your thoughts with us in the comments section below.

Further reading

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Read more Tesla news.

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