Could Elon Musk’s Tesla Network Replace Uber and Lyft?

In this week’s roundup, Tesla is coming for Uber and Lyft – but what are the chances of success? Plus, senior RSG contributor John Ince covers rulings against and for Uber and Lyft around the country, the future of rideshare after the pandemic, and innovative new ways universities are helping drivers.

Tesla Network ride-hailing app would quickly undercut Uber and Lyft, analyst says  [Electrek]

Sum and Substance:  Tesla has been working on its own ride-hailing app, Tesla Network, and now analysts are starting to figure out how to factor it into the automaker’s valuation….

“Based on our research, Tesla could launch its ride-hailing service at a premium price of $4 per mile, slightly more than Uber’s average price in New York City, and could lower prices over time to penetrate more price-sensitive markets. ARK estimates that Tesla’s ride-hailing service could deliver roughly 50% EBITDA margins, a premium to Uber’s in cities it dominates and, that at global scale and an average of $1 per mile, its addressable market would be roughly $50 billion.”

For years now, Tesla has taunted a ride-hailing app to be powered by its self-driving system.

My Take:  This really is way out there… or is it?  Elon Musk is in the habit of offering super big ideas – and then delivering.  Personally I don’t see it – because of all the regulatory hurdles – but who knows?

What Is The Future For Uber And Lyft After The Pandemic?  [Forbes]

Sum and Substance:  … Will the fear of infection will forever change the world’s adoption of the rideshare model? More likely, the companies are in ‘survive until they can thrive’ mode, as local, leisure and business travelers would return to the convenience of rideshare.

On May 7, Uber reported a $2.9 billion loss during the pandemic in the first quarter, a per-share loss of $1.70.

On the other hand, Uber Eats has been going like gangbusters to today’s home-alone crowd. In the first quarter of 2020, Uber Eats revenues grew over more than 50 percent, to $819 million.

My Take:  This is a good summary of where we stand in advance of the 2nd Quarter earnings calls.  Of note, Harry Campbell of The Rideshare Guy, points out an interesting development:  many drivers are making out just fine during this pandemic, with UI and other benefits.

Uber and Lyft Agree to Switch to Electric Cars [Science Times]

Sum and Substance: On July 17, California’s Air Resources Board (CARB) proposed the Clean Miles Standard program aiming to eliminate significant levels of carbon emissions from vehicles by 2030. Surprisingly, Uber and Lyft are on board with the proposal and are planning to change about 30 percent of their cars to electric….

There are three main types of zero-emission vehicles: plug-in hybrid, battery-electric, or hydrogen fuel cell vehicles. In the United States, the top three EV companies are Tesla, General Motors, and Nissan, which account for about 60 percent of electric cars sold in the country.

My Take:  So Uber and Lyft both said they want to be 30% electric by 2030.  That’s ten years away – a very long time.  Besides, what does saying they want to be 30% electric commit the companies to?

We looked into what this could entail over at Lyft Announces 2030 Goal of Transitioning Platform to Electric Vehicles.

A COVID-19 death renews questions of responsibility of Uber and Lyft to drivers  [LA Times]

Sum and Substance: SAN DIEGO —  Chuck Beckner begged his 71-year-old mother not to drive for Uber and Lyft during the pandemic. She didn’t listen. Then COVID-19 took Billie Sue Matchke’s life…

The pandemic has dramatically raised the stakes in the years-long fight over what protections Lyft, Uber and other gig-economy companies should be required to provide workers.

Adding to longstanding wage and benefit gripes, Matchke’s fate is now the nightmare scenario facing rideshare drivers everywhere. Some have recently gone beyond just wearing masks and wiping down door handles to also installing makeshift partitions in their vehicles to shield themselves from potentially infected customers.

My Take:  This is the way this industry is playing itself out.  Someone who was just doing their job is dead. Whose responsibility is this?

The laws are pretty clear.  It’s no one’s responsibility.  It’s just the way the cards were dealt.  Somehow that doesn’t seem right.

Uber and Lyft Drivers Win Ruling on Unemployment Benefits [NY Times]

Sum and Substance:  A federal judge granted a preliminary injunction instructing New York State to begin payments promptly, citing an “inexcusable delay.”

Drivers for Uber and Lyft won a key victory in their yearslong campaign to secure traditional unemployment insurance on Tuesday, when a federal judge in New York ruled that the state must promptly begin paying them benefits….

In her ruling, Judge LaShann DeArcy Hall cited “an avoidable and inexcusable delay in the payment of unemployment insurance” to drivers.

My Take:  This is a major victory for drivers.  The timeline for action is clearly spelled out and drivers should start receiving their payments very soon now.

What Exactly Is Uber’s End Game? [Marker]

Sum and Substance:  Food delivery is a losing game — so why is the most aggressive unicorn on the planet betting everything on it? …

In food delivery, Uber faced the classic business dilemma: build it, or buy it?

But if the restaurants handle delivery, their incentive is to skimp on speed and focus on quality — so the paradox of the asset-light delivery model is that when pricing power is highest (because the brand that matters is the platform, not the restaurant), delivery problems are the worst — and reflect poorly on the platform, not the restaurant.

That leaves the other approach: offering a platform and overseeing delivery, too.

My Take:  Interesting take on where Uber is headed.  Personally I don’t see a whole lot of profitability in food delivery.  Low margin business and lots of competition.  We’ll see.

Uber can’t be sued for undercutting taxi prices, California Supreme Court says  [SF Chronicle]

Sum and Substance:  The state Supreme Court rejected an appeal by taxi companies Wednesday of a ruling that shields Uber from claims of illegally cutting prices in order to damage its cab-driving competitors.

Lawsuits in 2017 by Yellow Cab and Friendly Cab Cos., and a proposed class-action suit by a San Francisco taxi driver, accused Uber of violating a 1937 California law that prohibits setting prices below the cost of service “for the purpose of injuring competitors or destroying competition.”

My Take:  So that’s the law.  Taxi drivers can’t sue.  It’s not a major victory for Uber and Lyft, but it is a victory.

NYU School of Global Public Health Creates COVID-19 Safety Training for Rideshare Drivers  []

Sum and Substance:  New York University’s School of Global Public Health (NYU GPH) is teaming up with the Independent Drivers Guild (IDG) to increase the safety of rideshare drivers and passengers during the COVID-19 pandemic.

NYU GPH environmental and occupational health experts are developing training programs and targeted protocols focused on evidence-based COVID-19 safety practices and tailored for rideshare drivers and passengers.

Editor’s Note:  This is a great partnership to help keep drivers safe, help researchers and students at New York University learn more about virus transmission, particularly in transit, and gets drivers some much needed personal protective equipment. It will provide a training program for drivers while also monitoring the safety and efficacy of the program.

Readers, what do you think of this week’s roundup?

-John @ RSG