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- Hacker News
- I wonder if the best analogy here is Amazon.
They allow 3rd party sellers in their platform and in their warehouses
There's many reasons for this but they include:
Somebody will compete in every segment: building the taxis, operating them, and vertically integrating them. Put another way - some people will buy taxis in this model either way, so Tesla is incentivized to participate in this also. That helps them get economies of scale.
It also of course minimize risk. But not just the obvious kind. It also minimises risk of a niche competitor taking the buy to own robotaxi market and from that wedge becoming a substantial competitor.
But also like Amazon - operators should worry about Tesla taking the data they have about most successful routes and using that to compete directly in the must lucrative identified markets.
- What an absurd lack of nuance.
Let’s consider the only major example of the alternative: Waymo. Waymo is expanding rather slowly, and I imagine there are several factors. Building the cars is capital intensive. Adding a new market requires some regulatory work, and it also requires acquiring and building a lot for the cars to park at and charge at. And hiring people to charge them. (The labor cost is a drop in the bucket — there is no reason to put serious effort into automating this.)
Perhaps Tesla wants to focus on its actual strength: building the cars. And perhaps they want to outsource the regulatory issues and the problems when all the cars get stuck in the same power outage, etc.
(I’m charitably assuming here that Tesla can actually build a viable robotaxi.)
by amluto - Vertical and integration like that has been very commonly and often tried in lots of different industries. Sometimes it works out, sometimes it doesn't. In the case of Tesla the work required to make a car and the work required to make a self-driving car are very similar. However, the work required to run a taxi company has very little to do with the labor required for use of the buffs. Thus, for Tesla and most car companies it is best to say I'm going to do what I do best and let someone else deal with that other hard part. It just loses too much focus to try and vertically
Taxis are a tiny niche in the transport market. They're certainly very profitable for the small number of people who run the companies, but they're a tiny niche and they will always be that way. There are too many advantages to owning your own personal automobile when you drive a lot. In turn, people who are driving their own automobile vehicle are the target of all car companies, taxies are an important niche but that is not enough to make a successful car company.
by bluGill - you could make this same argument about any business and any mechanism that raises outside capital to expand.
If McDonald’s restaurants were profitable, they wouldn’t sell franchises. Except it’s been an incredibly successful way to raise capital and expand, for both franchisees and McDonalds.
If company about to IPO were a great investment, they wouldn’t IPO. Except the stock market has been an incredible mechanism for company and capital growth.
by gricardo99 - people r tryin' to equate this to a franchise model, some the amazon 3rd party model.
nope - this is just Elon raising money without going to the stock market or government but directly to Elon worshipping idiots.
he benefits two ways - interest free Capex, then higher stock prices by reporting higher number of cybercabs on the road. & guess who takes a punch to the mouth - the Elon worshippers.
with the amazon model | franchise models there's shared risk - not exactly equal but shared risk.
with Elon - one person is eating the risk, while one person eats 90% of the gains.
by dzonga - Bit of a weird world where we don't have self-driving cars but we did manage to automate the writing of articles lamenting that fact.
- The author misses the difference between cashflow and profit entirely.
Selling a car today gives Tesla the full profits of that hardware production today. Running that car as a robotaxi means that Tesla eats the costs of the hardware today in exchange for a larger total profit collected over several years.
So operating a fleet gives the company access to more long-term profits at the cost of decreasing the bank balance today (negative cash flow), where selling the cars lets the company fill the bank account right now (positive cash flow) at the cost of limiting long-term profitability.
The decision to prioritize immediate cash flow vs long term profits depends on the financial position and overall strategy of the company.
by riknos314 - If McDonald's was profitable, they wouldn't try to franchise it.
That's what this is. You take on operating costs and you understand your local market. They own the brand.
by fieryscribe