Telsa has been touting its ambition to create a fully autonomous ride-sharing program for years at this point. The car company is finally making strides in that direction by releasing their own ride-sharing app, albeit with human drivers at this point.
Those who follow this space will remember Tesla CEO Elon Musk’s comments in 2019 stating that he is opening to releasing the “Tesla Network ” app ahead of achieving full autonomy. Telsa recently had their Q4 earnings call where Musk reiterated that plan.
“I think it will probably make sense to enable car sharing in advance of the kind of robotaxi fleet because the car sharing can be done before Full Self-Driving is approved by regulators. So it’s probably something that we would enable before a sort of robotaxi fleet is enabled,” said Musk.
We know a lot about what the Telsa Network app is going to look like. We do know that ride-sharing drivers will have to be in a Tesla vehicle to partake, and drivers will be covered under the automaker’s own driver insurance. As for an actual timeline for release, that is still unknown.
Tesla has been offering in-house car insurance policies since 2019 to combat the exorbitantly high rates that other insurers were charging to cover Tesla vehicles. That initial program involved Tesla partnering with existing insurers, but the insurance that the company has been talking about for the Tesla Network will be a new policy that Tesla has been building in house, from the ground up.
Currently, the completely in-house Tesla insurance is only available in California, though the auto-maker has made it clear that they plan to expand that offering in the near future.
Tesla CFO Zach Kirkhorn gave a few statements on the subject during that same Q4 earnings call. According to Kirkhorn:
“I think it would make sense for us to close-loop on higher use of Autopilot, it reduces the insurance costs as well as the probability of injury. So I think insurance is going to be quite a major product of Tesla over time. The amount of money that people spend on car insurance is like a remarkably big percentage of the cost of a car, like you can lease a Model 3 right now for $400 a month, but a typical owner in California will be paying sort of between $100 and $200 a month in insurance. So we’re talking about something [that] is maybe a quarter or two half of the cost of the lease of the car is insurance. And a lot of that insurance cost is just because the insurance companies don’t have good information about the drivers, and that there is no good way to provide feedback where it’s a very poor feedback mechanism in terms of the insurance rates versus the actual way that the car is being driven, whereas we can do that in real time. It’s a fundamental information advantage that insurance companies don’t have.”
It seems as though Tesla is committed to releasing a ride-sharing app in some form in the not-so-distant future. It will be interesting to see how their insurance program fits into their future plans, specifically when it comes to insuring ride-share drivers. Will a Tesla ride-sharing app change the world? Probably not, but a fully autonomous ride-sharing service would certainly be something to see.