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Watch out, Uber: Tesla hints of new car-sharing network

(Associated Press/Marcio Jose Sanchez)

(Associated Press/Marcio Jose Sanchez)

It’s no secret that Tesla has been on the brink of a major breakthrough when it comes to creating fully autonomous cars. A handful of automakers, such as General Motors, are developing autonomous technology as well, but none have gotten further than Tesla. Autopilot software has come standard in every Tesla model since October 2015 and has only been further advanced by over-the-air software updates. Now it looks like Tesla is looking to give Uber some much-needed competition.

Those interested in purchasing a Tesla vehicle have the option of selecting the “Full Self-Driving Capability” option. A disclaimer reads as follows:

“Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year.”

Elon Musk, Tesla CEO, created a plan nearly a decade ago that outlined his vision for Tesla’s ridesharing service. Titled “Master Plan, Part Deux,” the plan lays out the ground work for how the Tesla Network will operate.

According to the plan, Tesla owners can join the Tesla Network through the Tesla smartphone app. From there, the vehicle will operate autonomously, picking up passengers and effectively generating another source of income for the owner.

Musk’s plan cites that most owners only use their vehicle for up to 10% of the day. Tesla owners will be able to have their vehicles earn extra income while they’re at school, work, or even on vacation. That extra income could easily exceed the monthly payment on a new Tesla, making owning a vehicle much more affordable, if not profitable.

The Tesla Network comes at a time when many millennials are foregoing vehicle ownership altogether, instead choosing to use ridesharing services for their transportation needs. Considering that 70 percent of Uber’s American users are millennials constantly on the move, the availability of an on-demand autonomous vehicle could be a game changer for the industry.

The Tesla Network won’t be completely comprised of owner-supplied cars though. In cities where demand exceeds the supply of available personal vehicles, the automaker will operate a fleet of its own.

Musk, however, was quick to point out that this isn’t a battle of Tesla versus Uber or Lyft. In a conference call, he stated that this is a competition of the people versus Uber.

“Sometimes this has been characterized as Tesla versus Uber or Lyft or something like that,” Musk said. “It’s not Tesla versus Uber, it’s the people versus Uber.”

The move from driver-provided transportation to vehicle-provided transportation is quite the leap, to say the least. The Tesla Network will generate more income for drivers, effectively offsetting the cost of a new vehicle. Musk also claims that the majority of the revenue would go to vehicle owners as well. The question is whether or not it will be enough to combat Uber.

Uber takes 20 percent of the fare, leaving the other 80 percent for drivers. The value of having time while making extra money, however, could put revenue from the Tesla Network well above what they could make at Uber.

Tesla’s first mass-market vehicle, the Model 3, will cost just $33,000. That’s cheap enough to pique the interest of many young drivers, especially considering the monthly payment could be made through the Tesla Network.

Tesla isn’t alone in bringing self-driving cars to ridesharing services. General Motors, following a $500 million investment with Lyft, plans to create an autonomous Chevrolet Bolt. That model will be available to Lyft drivers. While General Motors is foregoing creating their own ridesharing service, the company’s influence in Lyft has grown substantially.

While Tesla wants to put autonomous vehicles in the hands of drivers, General Motors plans to keep control of ownership as the automaker develops its autonomous technology. Now all that remains is for the proper authorities to approve fully autonomous systems for the road. What comes after will be unprecedented and could easily shape how public roadways operate for good.

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