Tesla's Robo Taxi Network: Why they should start it now and what they need to do

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#1
Of all the news that came out of the shareholders event last week, the one I found incredibly interesting and not talked about much was Elon saying they may launch the "Robo" taxi network early with human drivers. Presumably, this would be existing Tesla owners with some kind of compensation model to rival (or best) Uber and Lyft. We all know the long-term goal is driverless cars that make money for their owners (whether privately owned or Tesla owned), but that may take upwards of 4 to 8 years to get to, due to needed regulatory approvals.

In my opinion, Tesla needs to launch their "taxi" network as soon as possible. I also have some ideas on what they could do to make it successful.

Why?
For a few reasons. First, they're already behind Uber and Lyft in this space. They really need to begin establishing their own footprint while there's still room for a third competitor, especially since the robo-taxi network is a big part of their future growth outlook. Secondly, this taxi network will serve as incredible advertising for their cars. People who ride in the Tesla Taxi network will be getting a first-hand look at their cars and capabilities. For drivers that have full-self driving paid for, it's advertising for the future capabilities of the car as well. Finally, by having a human driver now (with auto-pilot on), people will be given the opportunity to get used to the idea of a car "driving itself." It's a fantastic way to baby-step future riders to trust the self-driving capabilities of these cars, rather than having them dive into the deep end all at once.

But to launch this network, Tesla is going to need to entice riders and drivers away from Uber and Lyft. Here are some ideas on how they can do that.


Enticing Riders
First and foremost, you have to be price competitive with Uber and Lyft - duh. Yet, this is probably not enough on it's own. The novelty of riding in a Tesla will eventually wear off and users will go to the platform that is the most budget friendly and that has enough drivers to be a reliable service.

In order to encourage people to consistently ride on the Tesla network, the company should adopt some kind of "frequent rider" program. They already do this with the purchase referral codes, so it's in line with what they already do as a company.

For example, for every X miles you ride on the Tesla network (100? 500?), the rider is given a single entry into a monthly/quarterly drawing for a free Standard Range Plus Model 3/Model Y.

Alternately, they could develop a "point" system that would let riders accumulate points that could be used for things like: entries into free car drawings, credits towards future rides, credits toward the purchase of a Tesla, etc...

Uber and Lyft can offer something similar, but Tesla can really gear it towards excitement around their cars. The chance to win a Tesla could really entice people to look for a Tesla ride FIRST, before going to Lyft or Uber, especially if the price is competitive.

Enticing Drivers
It can't just be assumed that Tesla owners who drive for Uber/Lyft will just switch to the Tesla network. Obviously, the compensation from Tesla will need to be similar to Lyft and Uber. Since Tesla really isn't in a position to lose a ton of money on this venture, they may need to offset lower driver compensation with a rewards system for the drivers as well.

In the same way they would entice riders, they may want to offer a similar point system to drivers. Give the drivers the option to use those points (earned per mile driven?) on such things as: free supercharging miles, entries into free car drawings, purchase credits in the Tesla store, etc... In particular, the supercharging could be a big deal for drivers who drive often. Tesla may even want to consider a reduced supercharging rate for Tesla owners who are drivers on their network.

Tesla should also offer additional rewards/points to drivers that use AutoPilot with riders in the car. Again, this serves as powerful advertising for Tesla technology and builds confidence in their self-driving robo-taxi future.

Final ideas
Tesla riders who ultimately decide to purchase a Tesla should be asked if a particular driver influenced them (for automatic referral code usage). They can select from drivers they've used or an automated algorithm could be used to award it to the driver who had them for the longest period of time (that got a good review as well).

What do you guys think? If Tesla did these things, I'd definitely consider driving on the network.
 

FogNoggin

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#2
Of all the news that came out of the shareholders event last week, the one I found incredibly interesting and not talked about much was Elon saying they may launch the "Robo" taxi network early with human drivers. Presumably, this would be existing Tesla owners with some kind of compensation model to rival (or best) Uber and Lyft. We all know the long-term goal is driverless cars that make money for their owners (whether privately owned or Tesla owned), but that may take upwards of 4 to 8 years to get to, due to needed regulatory approvals.

In my opinion, Tesla needs to launch their "taxi" network as soon as possible. I also have some ideas on what they could do to make it successful.

Why?
For a few reasons. First, they're already behind Uber and Lyft in this space. They really need to begin establishing their own footprint while there's still room for a third competitor, especially since the robo-taxi network is a big part of their future growth outlook. Secondly, this taxi network will serve as incredible advertising for their cars. People who ride in the Tesla Taxi network will be getting a first-hand look at their cars and capabilities. For drivers that have full-self driving paid for, it's advertising for the future capabilities of the car as well. Finally, by having a human driver now (with auto-pilot on), people will be given the opportunity to get used to the idea of a car "driving itself." It's a fantastic way to baby-step future riders to trust the self-driving capabilities of these cars, rather than having them dive into the deep end all at once.

But to launch this network, Tesla is going to need to entice riders and drivers away from Uber and Lyft. Here are some ideas on how they can do that.


Enticing Riders
First and foremost, you have to be price competitive with Uber and Lyft - duh. Yet, this is probably not enough on it's own. The novelty of riding in a Tesla will eventually wear off and users will go to the platform that is the most budget friendly and that has enough drivers to be a reliable service.

In order to encourage people to consistently ride on the Tesla network, the company should adopt some kind of "frequent rider" program. They already do this with the purchase referral codes, so it's in line with what they already do as a company.

For example, for every X miles you ride on the Tesla network (100? 500?), the rider is given a single entry into a monthly/quarterly drawing for a free Standard Range Plus Model 3/Model Y.

Alternately, they could develop a "point" system that would let riders accumulate points that could be used for things like: entries into free car drawings, credits towards future rides, credits toward the purchase of a Tesla, etc...

Uber and Lyft can offer something similar, but Tesla can really gear it towards excitement around their cars. The chance to win a Tesla could really entice people to look for a Tesla ride FIRST, before going to Lyft or Uber, especially if the price is competitive.

Enticing Drivers
It can't just be assumed that Tesla owners who drive for Uber/Lyft will just switch to the Tesla network. Obviously, the compensation from Tesla will need to be similar to Lyft and Uber. Since Tesla really isn't in a position to lose a ton of money on this venture, they may need to offset lower driver compensation with a rewards system for the drivers as well.

In the same way they would entice riders, they may want to offer a similar point system to drivers. Give the drivers the option to use those points (earned per mile driven?) on such things as: free supercharging miles, entries into free car drawings, purchase credits in the Tesla store, etc... In particular, the supercharging could be a big deal for drivers who drive often. Tesla may even want to consider a reduced supercharging rate for Tesla owners who are drivers on their network.

Tesla should also offer additional rewards/points to drivers that use AutoPilot with riders in the car. Again, this serves as powerful advertising for Tesla technology and builds confidence in their self-driving robo-taxi future.

Final ideas
Tesla riders who ultimately decide to purchase a Tesla should be asked if a particular driver influenced them (for automatic referral code usage). They can select from drivers they've used or an automated algorithm could be used to award it to the driver who had them for the longest period of time (that got a good review as well).

What do you guys think? If Tesla did these things, I'd definitely consider driving on the network.
@DWalker, I agree with with every word of what you wrote! So many good ideas and such sound logic. I wish you could send this directly to Mr. Musk.
 

AutopilotFan

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#3
The only thing I would add is that it needs to be possible for the same driver/car to drive for Lyft, Uber, and Tesla at the same time. This will be vitally important at the start as the service ramps up, and will be desired by drivers until self-driving cars are legally permitted in the driver's area.

Some people drive for Lyft/Uber on a very casual basis, pretty much only when they're going somewhere and don't mind taking a little extra time to get there. It's like getting paid to drive somewhere you were planning to go anyway. That won't stop even after our cars can drive themselves.

Disclaimer: I've been toying with the idea of getting a rideshare rider for my insurance and driving for Lyft on the idea of getting paid for driving somewhere I'm going anyway. I'd have to drive at standard rates for a while before they'll let me charge for a luxury car, which is kind of a bummer and putting a damper on the whole idea.
 

slacker775

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#4
Seeing that they are trying to launch a similar - but not the same - offering, I’d be inclined to say they’d be better off waiting until they have or are very near rollout of the robo-taxi option. History has shown that there is often significant disadvantage to being first to market. You get bogged down dealing with the kinks and the followers can take all of the lessons that you had to painfully struggle through and start fresh without loads of baggage. The biggest differentiator with the robo-taxi model is taking out the human driver component. That piece is actively killing Uber & Lyft right now. Tesla would do no better in this area because people are people. People want enough money to live, they want benefits, they do stupid things, they freak people out, they hurt people or get hurt. All of that adds up to a lot of overhead and headaches. The market will be there if they are able to make FSD work dang near flawlessly. They are better off spending their time and resources making sure that happens so trying to jump in the water when they simply aren’t ready.

And lets be honest, they have had enough customer service issues with their few hundred thousand customers. All of the debacles with folks unable to get their refunds after the FSD pricing disaster etc. They don’t need further exposure to millions more fickle customers when they can’t even get the basics worked out.
 
Joined
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McDonough, GA
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#5
Seeing that they are trying to launch a similar - but not the same - offering, I’d be inclined to say they’d be better off waiting until they have or are very near rollout of the robo-taxi option. History has shown that there is often significant disadvantage to being first to market. You get bogged down dealing with the kinks and the followers can take all of the lessons that you had to painfully struggle through and start fresh without loads of baggage. The biggest differentiator with the robo-taxi model is taking out the human driver component. That piece is actively killing Uber & Lyft right now. Tesla would do no better in this area because people are people. People want enough money to live, they want benefits, they do stupid things, they freak people out, they hurt people or get hurt. All of that adds up to a lot of overhead and headaches. The market will be there if they are able to make FSD work dang near flawlessly. They are better off spending their time and resources making sure that happens so trying to jump in the water when they simply aren’t ready.

And lets be honest, they have had enough customer service issues with their few hundred thousand customers. All of the debacles with folks unable to get their refunds after the FSD pricing disaster etc. They don’t need further exposure to millions more fickle customers when they can’t even get the basics worked out.
You make some solid points here. I think there will definitely be an audience for their driverless service when it launches, but I also think it will be fear-constrained at first. I have quite a few friends who can't believe I used NoA on the interstates in Atlanta. I tend to jump on technology trends early, so it wasn't a leap for me - but many people I know don't even trust adaptive cruise control, much less the technology Tesla provides.

I do think that will *eventually* change as more and more people take a leap and have a good experience, but that could be a long ramp-up. It's hard to say. I still think exposure to these features via human drivers will drastically reduce that ramp-up, but your points about human drivers is a strong counter point.

Thanks for the feedback.