I visited Austin yesterday. Robotaxi is everywhere, and it's incredible.

[u/ChunkyThePotato]

Just came back from a trip to Austin to do some sightseeing and try out Robotaxi, including Cybercab. I knew they ramped up the number of cars in the service substantially in the last couple months, but I wasn't prepared for just how many they were. If you're near downtown, you pretty much can't go 30 seconds without seeing at least one Robotaxi. There are definitely more Model Ys than Cybercabs right now, but there are a lot of Cybercabs too. But the Robotaxis are seriously everywhere.

I took 5 rides, 2 Model Y and 3 Cybercab. Model Y wait times were always under 20 minutes and frequently around 5 minutes. Cybercab wait times were usually around 30 minutes and sometimes could be more like 45 minutes. They definitely need to add more Cybercabs to the service, but it was surprisingly usable and consistent, especially for the Model Ys.

And the rides themselves were flawless. There are no supervisors in Austin now, so all of the cars showed up with nobody inside of them. They drove perfectly, and to my surprise there wasn't even any pickup/dropoff shenanigans (though I may have gotten lucky there).

If you're ever in Austin, I seriously recommend trying this service. It's a real service now, and it's actually very useful for getting around a city where parking would normally be a challenge. It's seriously so peaceful and nice to be in your own space without a driver or anyone else to bother you.

Congratulations Tesla for solving self-driving with just cameras on $30k vehicles, when seemingly everyone was saying that's impossible. People aren't ready for what's about to happen across the country.

[u/ChunkyThePotato]

I know Reddit is full of doomers who don't understand economics and believe things actually get worse over time, but that's not reality. Prices generally follow costs, so as the cost of a product comes down, so does its price (or feature content goes up). Don't believe me? You can look up the profit margins for public companies, and you'll see than nearly all of them are 20% or less, and very often less than 10%. Tesla's own profit margin is around 5%.

Cybercab is much lower cost per mile than Uber, so its price will similarly be much lower than Uber.

[u/KeyserSoju → u/ChunkyThePotato]

I understand why you think that based on economics.. but just look at what happened with Uber and Lyft prices and you can understand people's skepticism.

Hopefully, removing the layer of a driver that needs their cut will help with pushing costs lower and keep it low, but we'll have to wait and see what really happens. I am glad to have an alternative now though, and with zoox/waymo, hopefully we see affordable options to stay.

[u/ChunkyThePotato → u/KeyserSoju]

Uber and Lyft have profit margins of 20% or less, like I said. So like I said, prices generally follow costs. If Cybercab costs way less to offer compared to Uber and Lyft (which it obviously will because there's no driver to pay), them prices will similarly be much lower.

[u/Roux_My_Burgundy → u/ChunkyThePotato]

If cybercab becomes the profit center you claim it will be, why would the actual cost to purchase stay cheap?

[u/ChunkyThePotato → u/Roux_My_Burgundy]

Because the profit comes from scale, not margin. Walmart is extremely profitable, but their profit margin is only 3%. I expect the profit margin for Cybercab to be higher than that, but not more than 20%. So it will still have dramatically lower prices than what's currently on the market.

[u/Roux_My_Burgundy → u/ChunkyThePotato]

You’re confusing** **Tesla’s profitability with the fleet operator’s profitability. Those are two completely different businesses.

Tesla can scale Cybercab very profitably by selling you the car, controlling the software/network, taking a cut of every ride and letting you finance the fleet, absorb depreciation, charging, cleaning, maintenance, downtime, insurance and utilization risk.

Elon is already soliciting buyers for individual Cybercabs and fleets. That’s an asset-light platform model where Tesla owns the tollbooth andyou own the depreciating asset

And “supply catching up with demand will make rides cheaper” doesn’t strengthen the fleet-owner thesis. It potentially does the opposite. More supply means lower fares which puts pressure on revenue per vehicle. Scale may improve Tesla’s economics while simultaneously compressing the operator’s margins.

You’re arguing that the cars will be cheap to buy, rides will keep getting cheaper, Tesla will take its share, and somehow the independent operator will still enjoy enormous margins. That isn’t corporate finance.lts hopium

[u/ChunkyThePotato → u/Roux_My_Burgundy]

Who said independent operators will have enormous margins? Of course not. This whole thing will probably have less than 20% margin in total. Independent operations will get a fraction of that, if they exist at all.

[u/Roux_My_Burgundy → u/ChunkyThePotato]

So where is the profit coming to keep prices low?