Lyft And Uber Face Severe Competition In The Coming Years As Musk Announces Tesla’s Plan To Enter The Ride-Hailing Business
Ride-hailing companies have gained a lot of popularity over the years and I don’t just mean in terms of the scandals that have surrounded them. Uber and Lyft are two very popular names that come in our minds when we think of ride hailing services. It seems that Tesla CEO Elon Musk has recognized this potential and in the third-quarter earnings call said that the company very ‘obviously’ plans to jump in this line of business with its self-driving cars.
Musk Has Big Plans For A New Era Of Ride Hailing Services
Musk wants to create a new era of ride-hailing services. He said. “Tesla will operate its own ride-hailing services and compete directly with Uber and Lyft, obviously.” The Tesla platform isn’t yet operational but according to Musk it will give the customers the opportunity to ‘offer their car, add or subtract to the fleet at will’. Musk compared this business idea to that of Airbnb which is all about peer-to-peer dealings. With Tesla’s service, the autonomous vehicles will pick and drop passengers whenever enough cars aren’t available.
Many other companies are trying to develop self-driving cars as soon as possible and these cars will be much more than the plain old autopilot mechanism. This autopilot system currently provides driver assistance and handles just a few of the tasks for drivers. In the second quarter Tesla had announced that they were developing chips that would help increase the automation function for the vehicles. The company sells ‘full self-driving’ options to people willing to pay now and wait for the final product. However, this option is ‘off-menu’ and not listed anywhere on the website.
The self-driving cars are still in development and in the meanwhile, the new Autopilot Navigate features by Tesla allow drivers to change lanes, handle forks and take highway exits along a planned route automatically. If tesla does enter the ride-hailing business with its automated cars, how much will Uber and Lyft be affected by it? What are your views on the matter?