What if Tesla Bought Out Uber?

Would it become profitable if Tesla were to buy out Uber? What would ridesharing look like if Tesla were involved? We’ve briefly covered the rideshare-like program that Tesla is working on, but would it make more sense for Tesla to just jump on the actual rideshare bandwagon and dig Uber out of the pit? Let’s explore!

Uber v. Tesla

We already know there’s a pretty big race among rideshare companies to have autonomous vehicles become the norm, and we know that Tesla has significant technology to help make this possible.

Uber investors want to see progress in the self-driving car side of the business. To get self-driving cars on the road is seen almost as a futuristic ideal that major companies are aiming for.

But before we get to that point, rideshare could use a little help to become profitable and keep rideshare drivers on the road and earning money. Plus, one writer’s suggestion in an article asking this same question states that drivers could save money if they were using Teslas as opposed to gas-powered vehicles.

The writer, Benjamin Schulz states, “The electric car would perform financially a lot better — on average saving $0.80 to $1.20 per trip (with some very rough calculations, we find savings of $10,500–15,000 on 75,000 miles gives us $0.14 to $0.20 per mile, or $0.80 to $1.20 per trip at a 6 mile average per trip).”

That is significant. Every little bit adds up.

Here’s a look at the cost of ownership between the Tesla Model 3 and the Toyota Camry.

what if tesla bought out uber?

The cost of owning a Tesla Model 3 in this comparison is approximately $5,200 less than the Toyota Camry SE over a 5 year period. So, as a driver, I could be keeping about $1,000 a year in my pocket instead of spending it on my car.

Making the transition from gas-powered to electric vehicles would also be in keeping with Uber’s current goal of having a zero-emissions footprint by 2040.

Of course, it couldn’t really force its drivers to switch to Teslas without some kind of incentive, or discount associated with it. I’m sure Tesla would come up with a transition period for drivers to make the switch.

Could Tesla Make Uber Profitable?

Probably. If any company could do it, it would be Tesla.

They are already working on a ridesharing service where owners of Teslas can put their cars on the “market” for people to rent and use. The biggest difference is that the goal of that is to have the cars be autonomous.

The problem with autonomous vehicles is that they come with a whole host of problems to work through, so while Tesla is testing out their driverless vehicles, they could still be earning with the rideshare business of Uber. Uber already has the app that everyone is familiar with and a large fleet of drivers.

Part of Tesla turning Uber profitable would be that investors might be willing to hop on board or spend more if Tesla is behind the changes being made. Tesla’s CEO Elon Musk is known for having large ideas and running with them—and making them happen.

ARK Invest posted about the idea of Tesla getting in on rideshare: “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.”

If Tesla could do it on its own, they could probably turn a profit on Uber.

My Take

Of course, this all depends on if Tesla even wants to buy out Uber and take on those added responsibilities as a company. Tesla might just want to focus on their robo-taxi idea and forget the idea of having paid drivers behind the wheels of their electric vehicles.

That would ensure Tesla wouldn’t get into the same legal battles that Uber has been in over worker classification, at least.

However, if Uber doesn’t become profitable soon, who knows how much longer they’ll be around?

Drivers, do you think Tesla could or would buy out Uber?

-Paula @ RSG