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Is Elon Musk Wrong About the Transportation Revolution? Tesla Motors Inc (TSLA)

Tesla Inc (TSLA)

Tesla Motors Inc Chief Executive Elon Musk is wrong to think that the automotive revolution will depend entirely upon private ownership, says John Zimmer – Lyft president. Zimmer predicts that his ride-hailing fleet of cars will mostly be autonomous within the next five years. Also, he added that by 2025, “private car ownership will all but end in major U.S. cities.”

 

Tesla is wrong about the transportation revolution

On Sunday, the CEO of Lyft posted his manifesto, titled “The Third Transportation Revolution: Lyft’s Vision for the Next Ten Years and Beyond,” on Medium. Zimmer painted a fantastical vision of the future, envisioning a future where customers can hail an autonomous Lyft by paying by a subscription model similar to Spotify and Netflix or by-the-mile, says The Verge.

Tesla Motors Inc (NASDAQ:TSLA) Autopilot

Echoing the experts and academics that predict parking lots and streets will change into open spaces and housing with the mass-adoption of self-driving cars, Zimmer said that the end of ownership will change cities in big ways. He added that it will change the daily experience of riding in a car as well.

In the letter, Zimmer wrote Tesla Motors Inc CEO – Elon Musk – is right, but the transition to an autonomous future will not occur just through individually owned cars. Zimmer called automobiles “a $9,000 ball and chain that gets dragged through our daily life,” adding that the future of ride-hailing is mostly about new drivers, who do not want to make monthly car payments, buy fuel, search for parking or deal with repairs that accompany private car ownership.

Zimmer further noted that just 24% of 16- to 24-year-olds in the US have driver’s licenses, whereas in 2014, the number was 77% and in 1983, the percentage was 92%. He said the ridesharing has started to empower many people to live without owning a vehicle.

Lyft lags Uber in public perception.

Lyft’s ride-hailing service has seen good growth. The company claimed that this year, its drivers gave around 14.6 rides per month through August. However, Lyft continues to lag rival Uber in public perception.

Earlier this year, the ride-hailing service partnered with GM, to create an autonomous vehicle network. Moreover, the ride-hailing company has made a deal that give its drivers better terms to lease electric cars from GM to conduct the business using limited gasoline. The car leased will mostly be Chevrolet Volt hybrids and the coming Bolt EV plug-in vehicle.

Lyft has been testing autonomous vehicles on public roads in Phoenix. In addition, Lyft has announced plans to start self-driving ride-hailing sometime next year. Rival Uber is doing that already in limited way.

In pre-market trading today, Tesla shares were in the green. Year to date, the stock is down almost 14% while in the last one-year, it is down over 21%.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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