$TSLA Wants Efficiency As Riders Want Convenience

$Tesla Motors(TSLA)$ is coming at robotaxis with a simple thesis:

Efficiency wins.

Take the biggest part of the demand curve — one or two riders, short trips, dense metro areas — and drive the cost per ride as low as possible.

Tesla’s Cybercab is clearly designed around that philosophy, with a small two-seat configuration and a focus on low operating costs.

But there’s one problem.

People don’t always choose the cheapest option.

If cost were the only thing that mattered, everyone would take the bus.

People pay for convenience.
Comfort.
Safety.
Cleanliness.
Predictability.
Privacy.
And sometimes, simply a better experience.

That’s where $Uber(UBER)$ has an interesting advantage.

Uber doesn’t need to provide one type of ride.

It can connect riders with thousands of different types of supply — cheap, premium, larger vehicles, luxury, autonomous and eventually everything in between.

Tesla can potentially offer an extremely efficient, standardized ride.

Uber can offer a marketplace built around choice.

Both models can win.

But I think the bigger opportunity may be in differentiation rather than commoditization.

The winning robotaxi network may not be the one with the lowest cost per mile.

It may be the one that gives customers the most reasons to choose one ride over another. 👀