Talk about wooly headed thinking!

Elon Musk has finally figured out how Tesla can deal with Uber

​More below.

Talk about wooly headed thinking!

Elon Musk has finally figured out how Tesla can deal with Uber

The setup:

"If you haven't been paying careful attention, you might have missed that Tesla has been eclipsed by Uber as the most interesting company in the world.

Don't get me wrong: Tesla is still very, very interesting.

But Uber has captured the startup Zeitgeist in the same way that Tesla did a decade ago and ridden that wave to a $60 billion-plus valuation, while Tesla has to content itself with a mere $30 billion market cap.

Electric cars are just so 2010. In 2016, ride-sharing is the New New Thing, and everyone in the transportation business is trying to figure out if Uber can combine ride-hailing with the New New Things — self-driving cars — and establish a mind-warping paradigm shift.

This is why Uber's debut of an experimental self-driving fleet of cars in Pittsburgh was such a big deal. If Uber can scale that idea, it would have the potential to monopolize on how billions of people worldwide get from point A to point B for next hundred years. Travis Kalanick's startup would rapidly advance beyond being just a tech'd-up taxi service.

There would suddenly be far fewer justifications for owning a vehicle."

Electric cars are so 1910 not 2010, only the ahistoric fall into that trap. Perhaps they will finally be able to stick the Triple Lindy, but I am not making that bet as yet. I never understood how Tesla became "the most interesting company in the world. It's a modern battery powered car for gawd sakes, just like the variants available throughout the 19th century. 

"Tesla CEO Elon Musk formerly was not all that hot on the whole de-ownership concept for two reasons.

First, it didn't make intellectual sense to him — he saw people sharing their living spaces through Airbnb, but like a lot of people in the car business, he didn't think that widespread car-sharing was going to displace the conventional ownership model.

Second, Tesla is deeply invested in the ownership model. It needs customers to be willing to go into debt to finance its expensive electric vehicles. Even a cheaper mass-market EV such as the Model 3 will require a car loan or some type of lease — customers simply aren't going to have $35,000 in cash lying around."

I don't understand the first issue at all, a car is less personal than a bed, so sharing my home is much more personal than sharing a car. Yes, we stay at hotels, or share an Air BnB but that is because we have no other options. I have never batted an eye at a rental car, but I have walked away from a bad hotel room.

And the second doesn't matter a whit to the auto user.

So, Musk's idea here is that you will pay $100,000+ for a car, and then want to rent that car out while you are not using it. I don't get it. If you have the money for that car why rent it out? Also, how much will you need to recover in fees to make this worthwhile? The Uber cars will likely in the end be many sizes to accommodate many different sized groups, but they will all have small engines. No one cares about a 454 cu in engine with blowers, or turbochargers if you aren't driving. The performance issues is a dead letter for people riding in the back. The computer driver will not say, "Hold my beer and watch me do a General Lee!" These cars will be cheap to operate. How will the expensive to operate Tesla compete, or will the Tesla owner just get screwed while thinking he is getting a deal? If you are paying money to buy a car, and renting it out and getting less money than you could have through a reasonable investment minus the cost of using Uber, you are making a poor economic decision. 

The Tesla will not be cheap to operate. I can't fathom why people would be willing to pay a premium sufficient to amortize a $100,000+ car when there will be new, clean, very acceptable alternatives which cost cents on the Tesla dollar. 

"Because the solution is a compromise, I would hesitate to label it brilliant. But as our most recent Nobel laureate in literature once put it, the times, they are a-changin'."

I wouldn't hesitate, this is not a brilliant idea, it is an idea which does not really make much sense. Perhaps there will be a pent up demand to ride around in a Tesla, and those people will be willing to pay the necessary premium. I don't know, but I suspect that novelty will wear off quickly. 

Perhaps Musk will figure out the financial problem, and clear the way for millions of people to become the owners of rental cars. 

I wish Musk good luck, I think he will need it. It seems more likely he will be the last automaker into the system before the auto becomes a commodity.