Common Ground for Tesla and Uber
Elon Musk has a new plan for Tesla in creating market diversity the same way Uber, a company based on the notion that the driver is similar to a taxi service but with the ability to choose their own hours, routes and pay. This ability, much like owning your own business, affords flexibility, safety and the self-starter attitude of an entrepreneurial endeavor. Tesla seeks to follow suit and join this market by the creation of their own app and ability to add your car, as long as it is a Tesla, to the fleet and become a driver for them. This serves the same purpose as Uber, in that driving a passenger on your way to work or on vacation may be useful to offset or pay for a loan for such a vehicle.
Uber, Lyft and Tesla may have more in common that you think. These companies are quite vocal about long-term plans for autonomous vehicles and they role they play in the success of the company. Both companies utilized a product or service to enter the market with large obstacles upon entry. Uber required major human capital and strong regulatory guidance, while Tesla needed to create an automobile from scratch while at the same time, adding complete innovation to the market. Both of these companies have been extremely successful in their pursuits, although Uber is hemorrhaging money in China and Tesla following through with its expensive Gigafactory, a large lithium-ion battery factory in Nevada. Both are infatuated with autonomous vehicles, as Uber pushes to hire the best talent from Carnegie Mellon to test these technologies.
These autonomous vehicles are not an end, but a means to that end in lowering transportation costs. Uber seeks to create a solid foundation for the self-driven vehicle to reduce those costs, while Tesla already hold this quality, but lacks the vehicle utilization rate and wishes to boost those ratings. To do so, they must use car-sharing, similar to Uber. These moves by either company put up a competitive barrier and add hostility to the market as the solution to the gap decreases. Uber looks forward to lower costs to open up the lower income market and broaden their ability to utilize the more rural locations, creating a more diverse portfolio and business model. This shows an increase ability to employ lower density regions and show how everyday Americans are able to remove the current system of owning a car is archaic. In contrast, Tesla needs to show how their plan of decreasing the cost of driving and increasing the access to electric vehicles will overcome the issue of an overall carbon footprint, broadening their market.
Autonomous driving shows promise for both companies in the long term, but must invest now to create such an atmosphere. The key for companies such as these lies in ensuring that core-business is not negligent in these future investments. As Google and others find their way into this market, these businesses must create a competitive edge and boost their product above their competitors. Tesla is able to compete using their state of the arc technology, but winning that competition is reliant on betting on the future of transportation and how it may be. It is likely that in the near future, the outright purchase of electric vehicles or paying a large sum of money to be transported in a gas guzzler will be a thing of the past. This requires engineers to think with a certain perspective and a knowledge of what is to come.
In a market such as this, technology and innovation, coupled with sheer man power and diligence can only elevate a company so much. The rest relies on correct investment as well as proper partners and a solid market. The best option for Tesla in the coming years is to diversify with ideas such as car-sharing to keep investors interested as well as hold stock prices at a current increase. To keep a company from fluctuating while the current market is not stagnant shows true success. Uber was founded off of the rebound from the 2008 market crash and has played to its strong suits as well as started to diversify its clients. It is time for Tesla to do the same.