Tesla ride-hailing app is likely to fail. UBER and Lyft could not turn profitable for a decade. Why Elon Musk thinks he can do it?
Chief Chicago Limo has been following the rideshare business model for years. Therefore, we think we have a strong reason to believe that Tesla’s new adventure will not turn out well. In this article we will touch the reasons why Elon Musk and his ride-hailing app, the Tesla Network, will not be successful.
The News About The Tesla Ride-hailing App
The news that Tesla will launch ride-hailing app with its own driver insurance is already circulating. Is that really a news actually? Is it something new? Rideshare apps have been around for over 10 years. Some offering cheap services, while others focus on the high end.
The so called “Tesla Network” is a business model which is supposed to compete with UBER and Lyft services. Of course, it will go after the traditional limousine and taxi services. In the very end, it will be a driverless car service.
Great idea, but we think it’s very likely to be successful first on Mars, and then on Earth.
Tesla Ride-hailing App Bugs
Tesla Ride-hailing App Will Have Coverage Issues Due To Working Only With Tesla Models
The Tesla Network will consist only of Tesla vehicles. Having a Tesla ride-hailing service with only one make is very risky decision. Especially, when you bet on high-end electric vehicles.
Having only Teslas on the fleet will restrict coverage area and availability. Imagine how many Teslas there must be on the road to meet the demand for rides. When a client opens the ride-hailing app and see there are no Teslas or the wait is too long, will not be very appealing. Then they will try to order UBER or Lyft rideshare. Even these two clowns do not guarantee availability early morning, late night or in remote areas. For that reason, travelers still rely on prearranging a ride with a limousine service or taxis. Reliability is very important in the ground transportation industry and Tesla seems to ignore that.
Lack Of Full Size SUVs In The Tesla Ride-hailing App
Tesla might have luxurious sedans and SUVs but go and try to fit 6-7 people with 6 large bags in a Tesla SUV. If Musk gets into ride-hailing without the proper portfolio of vehicles, he may get out of it pretty quick. Size matters when it comes to ground transportation. Families and business groups will still prefer a limo service which can accommodate the size of their party. Business evolve and so is the ground transportation. The last few years, sedans are disappearing anyway in the limo service industry. Chicago is an example for that. Slowly, but surely, the SUVs are taking over. So Musk better sit down and design a worth one this time.
Tesla Owners Are Likely To Opt Out To Participate In The Tesla Ride-hailing App
Who buys a Tesla? According to Lending Tree and Hedges Company, the average household income of a Tesla model owner exceeds a six-figure income. Click here to read who owns a Tesla model. I wonder how Elon Musk can make these owners give rides to strangers, wake up at 4am, come home at midnight or work Sundays and holidays? Good luck with that, Mr Musk! That also will lead to issues with availability and reliability.
Driving Range Issues
As of 01/10/2020, according to Washington post, Tesla’s longest driving range is roughly 370 miles. And that’s laboratory results, while real results vary based on many variables. So… imagine you Ride-hail a Tesla with 40% battery(148 miles range) for a car service from O’hare to Kalamazoo Michigan. Are you ready for what’s next? You will have to perform a stop to charge the Tesla a bit while you are paying for that ride?! And then, your driver will be stuck in Michigan to fully charge the car so he comes back home. Though we can see here and there an amateur UBER/Lyft driver gas up with passengers in the car, that is unacceptable for a luxury car service as Tesla ride-hailing app wants to be.
In addition to that two interesting questions arise here: How long does it take to charge a Tesla to 100%? How much does it take to charge your Tesla? Up to 3-4 hours is the time it takes to charge the Tesla and can cost you $22 for a full charge. On the contrary, you can fill a 2020 Toyota Prius hybrid with these money and drive it for 565 miles. Are electric cars really to a stage where they can transport passengers in USA?
Limited Access To Charging Stations And Cost Associated With That
While metropolitan areas are having Tesla charging stations here and there, distant and rural areas are still dragging behind. In addition to that, Tesla super chargers are still paid and expensive. Even if Tesla is luring new clients with free super charging, the company itself is accumulating hundreds of millions of dollars in losses from that.
Wrong Pricing Schemes
A ride with a driver from the Tesla Network is projected to be at $4 per mile. That’s a high premium to pay for the Tesla ride-hailing car service. For these money clients will require more than just a nice Tesla model. They will expect a high quality service a simple Tesla car owner cannot deliver. A Tesla ride-hailing driver have to wear suits, opens doors and help with luggage. That’s something where even the great UBER Black failed to keep up with.
Another thing Elon Musk can try is predatory pricing. He can desperately dump the prices, like UBER and Lyft did, to try to gain market share and survive. But that strategy did not help the rideshare giants. It actually drove them in the ditch.So before going live Elon Musk must define the mission of the service which will dictate its price.
Tesla Ride-hailing App Will Cause More Chaos On The Road
It’s scientifically proven that the current rideshare companies are the reason for today’s traffic congestion. But think, UBER and Lyft barely have Tesla cars signed up. On the other hand, the Tesla Ride-hailing app will consist of only Tesla models. That will put thousands of Teslas in the streets and contribute to worse traffic jams. Do we really need that?
Elon Musk’s Disorientation About Time And His Expensive Hobbies
Elon Musk took on on many projects boldly with the promise he will deliver them in a reasonable time frame, but that turns out to be not well thought of. Every project has time frames and planned costs. Musk repeatedly fails to meet both. Elon Musk’s Tunnel Project in Los Angeles turns out to be a bad joke. Thank God he did not start the Chicago underground tunnel connecting downtown with O’hare airport. And by the way, we have had tunnels from hundred years ago. It’s nothing new in the end. He starts these hobbies of his, but always keeps on looking for taxpayers money to finance them.