Published on October 27th, 2016 | by Zachary Shahan0
The People vs Uber, & Why We Love Elon & Tesla So Much
October 27th, 2016 by Zachary Shahan
One year ago, when Morgan Stanley analyst Adam Jonas initially needled and nudged Elon Musk to talk about a potential Uber-like service from Tesla, Elon basically admitted that something was in the oven, but also that the details weren’t yet clear. As it turns out, one of the dramatic differences between what Tesla is going to offer and what Uber is offering is where the money goes.
I’ve written at length about why so many people love Elon Musk. One part of that is simply that Elon is very intent on helping society — he cares about people and the future of our species, much more than the average Donald.
On Tesla’s quarterly financials conference call last night, a question directed at Elon asked whether the planned Tesla robotaxi service was more of a revenue-generation tool or as a consumer benefit that is just aimed at pulling more customers to Tesla. Naturally, “it’s a bit of both,” Elon pointed out, but the comments that followed were perhaps the most attractive jewels of the call.
“Sometimes it’s been characterized as Tesla vs. Uber,” Elon said. “It’s not Tesla versus Uber, it’s the people versus Uber.”
The point is that Elon launches and guides his businesses in order to help society as much as possible. In this specific case, that means giving Tesla buyers more of the revenue from a robotaxi service. Inherently, that is going to attract more people to Tesla, increase the sales of EVs, increase electric robotaxi service and use, hasten the move away from fossil fuels, more quickly stop global warming, and more completely serve society. The obvious point a lot of people seem to miss is: if you serve society well, your company will be rewarded by the market. Tesla will be taking some revenue from the robotaxi business, and the revenue is likely to be worthy of the early questioning Tesla is getting on the topic, but it is by making the service a great deal for Tesla buyers as well as the people requesting a ride that Tesla will actually make itself the market leader.
Uber, on the other hand, has basically written some software that makes “taking a taxi” a bit more convenient, has gotten around taxi regulations that help make Uber’s costs lower, and offers pretty low compensation for drivers. With self-driving vehicles, it would cut its employee costs much further and take home much more revenue, but it would also centralize the benefit to a much greater extent, not sharing the revolution with common consumers — “the people” — like in Tesla’s apparent model.
Elon made a similar point in answer to a different question, in which he highlighted that companies exist in order to offer compelling products or services to customers but that a lot of companies and people lose sight of that. His goal at Tesla is to make products that consumers love — really love — and then to use the revenue to make new products — again, products that consumers love.
Uber is basically one of the companies out there that many people argue is following that route, but there’s a lot of criticism that the company isn’t doing right by its employees in the process.
So, to add on to Elon’s comments, I would say that he is also intent on making his companies fair, moral, and helpful across the board — for employees as well as customers. He has expressed his focus on “doing the right thing” on many occasions, and I think the Tesla robotaxi idea is just another example of that … or I just drank the Kool Aid, but if you think this is all about Kool Aid rather than genuine ethics and morals, I don’t think there’s much I can write for you at this point that would convince you otherwise.
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