Tesla Model 3 NYC Taxi Worries Uber and Lyft

Last week, Electrek reported that Tesla Model 3 (TSLA) became the first-ever electric vehicle to get approval to run as a yellow taxi on NYC (New York City) roads. This could be a big step for Tesla Model 3 in being mainstream. Also, this will help the company compete with ride-sharing companies like Uber (UBER) and Lyft (LYFT).

Last year, Tesla’s Elon Musk said that the company is “obviously” looking to compete with Uber and Lyft in an autonomous vehicle era. Tesla Model 3 as a taxi may be the first step in that direction.

Tesla stock closed flat yesterday while Uber stock saw a 9.9% decline in Uber’s Q3 results. Uber’s lockup period is expiring today. Additionally, the stock may see losses extending. Lyft stock lost 3.4% yesterday.

Tesla is growing. In the first nine months of 2019, Tesla’s vehicles held over 75% of the EV (electronic vehicle) market in the US. General Motors’s (GM) Chevy Bolt EV came fourth after Tesla’s Model 3, Model X, and Model S.

On the other hand, legacy automakers are struggling. In September, Fiat Chrysler (FCAU) saw a 9.3% decline in vehicle sales. General Motors saw its shipments drop by 10.4% in September. And Ford (F), the third-largest American automaker, saw an 11.8% decline in its car and truck sales. GM, Fiat Chrysler, and Ford saw 1%, 1.1%, and 3.8% falls in their shipments, respectively, between January and September this year.

Legacy automakers are already battling changing car-ownership models, the rise of ride-sharing companies like Lyft and Uber, and competition from Tesla. Soon, we may see their worries growing if Tesla taxis are on the road. Fiat Chrysler may buy tech from Tesla to build its EV portfolio.

Beyond EVs, Tesla’s expertise lies in its autopilot software. The company promised 1 million Tesla Model 3 Robo-Taxis by the end of next year. Tesla even designed its own hardware to dominate the autonomous tech scene. Elon Musk said in April that Tesla “which has never designed a chip, designed the best chip in the world.” Also, he said that “all Tesla cars right now have everything necessary for self-driving available today. All you need to do is improve the software.”

Additionally, other automakers are playing with autonomous technology. Ford and GM are building their autonomous systems on top of LiDAR (Light Detection and Ranging) technology. However, Elon Musk said that “anyone that’s relying on LiDAR is domed.” Also, Uber and Lyft are in the autonomous race. The reason is simple. Autonomous cars will entirely change the way we travel and make our car-ownership decisions.

Since fully autonomous cars won’t need a driver at the wheel, sharing them would be easier. Imagine a world of driverless cars. If you use your car for 2 hours a day, it’s free for the other 22. And since fully autonomous cars won’t need a driver, they will go around by themselves. In turn, owners of driverless cars can more efficiently monetize their cars when they are not using them.

Approval of a Tesla Model 3 taxi in NYC is really the first step towards a shared, cleaner, and driverless world!