Can Tesla Leave Uber, Lyft In Dust With Robotaxis? Ark Analyst Sees Autonomous Ride-Hail Profits Hitting New Heights

According to an analysis by Cathie Wood-led Ark Investment Management, EV giant Tesla Inc’s TSLA potential platform fees in autonomous ride-hailing could be much higher than previously estimated.

What Happened: Ark analyst Tasha Keeney suggested that Tesla’s platform fees could command a staggering 80-90% of the gross revenues from autonomous ride-hailing. 

The previous estimate of a 60% take rate — still higher than Uber Technologies UBER and Lyft Inc‘s LYFT 20-30% — was reconsidered due to factors such as improved safety and operational efficiencies in autonomous vehicles, according to Keeney.

“Autonomous ride-hail operators should be able to curtail execution costs, importantly, the cost of finding a good driver,” the analyst wrote, adding that this would be akin to how Zillow eliminates search costs, Airbnb ensures fair transaction costs and Amazon eliminates distribution costs.

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By leveraging its self-driving technology and compensating vehicle owners at competitive rates, Tesla could charge passengers around $2 or more per mile. This pricing model mirrors current ride-hail companies, while enabling Tesla to capture the lion’s share of the revenue, according to Keeney. 

The Catch: Tesla may need to offer enticing incentives to attract vehicle owners to join their network, especially during the early stages, Keeney said, adding that changes may be necessary as the service expands across different regions and faces increasing competition. 

Additional costs like congestion taxes could also impact the profitability of Tesla’s autonomous ride-hail service in the long run, Keeney said.

Why It Matters: Tesla has been considering Tesla Network ride-hailing app for a while. The EV giant envisions its full self-driving capacities enabling its cars to operate as autonomous robotaxis, which Ark has said could turn into a “revenue generating machine.” According to CEO Elon Musk, Tesla is “very close” to reaching autonomy.

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