When asked about a potential partnership with ride-sharing service Uber on a recent earnings call, Tesla’s CEO Elon Musk paused for a long time before dodging the question.
During a conference call discussing the company’s second quarter financial results, Morgan Stanley analyst Adam Jones asked Tesla’s founder about recent proclamation from Uber chief executive Travis Kalanick that if Tesla makes autonomous cars by 2020, he would purchase all of them for his ride-sharing service. The analyst asked Musk if Tesla is thinking of operating its own ride-sharing business and, after a long pause, the inventor simply said “I don’t think I should answer it.”
The lack of an answer leaves the question open; is a Uber-Tesla partnership on the cards? Uber may want to partner with Tesla to gain manufacturing experience, especially since all signs point to the ride-sharing service trying to create some sort of autonomous car to replace its drivers, thus removing all the employment issues, including the GST rule in Australia.
The Wall Street Journal cited Musk last September as saying the technology to build a fully autonomous car will be ready in five or six years, creating a safer environment for traffic participants. Tesla’s plan to produce 500,000 cars with autonomous functions by 2020 has sparked interest from Uber executive Travis Kalanick. Venture capitalist Steve Jurvetson, who is also a Tesla board member, said during a July Top 10 Tech Trends dinner that Uber’s CEO told him “he’d want them [autonomous Tesla cars] all,” but he “couldn’t get a return call from Elon [Musk].” Jurvetson said he has been in a robocar “several times, several different types” and he admitted he would trust his children with them.
For Tesla, having a massive company like Uber lined up for a concept which is not yet a reality could be a big win. However, if it really wants to get into the ride-sharing business on its own, it could quickly become a fierce rival rather than a supportive car seller.
Uber has been facing plenty of backlash due to and from its drivers who, according to an August 6 hearing in San Francisco, want to be considered employees rather than independent contractors. Uber has recently decided to increase prices by approximately 10 per cent in each Australian city where UberX is available. The increase comes after the ride-sharing company challenged the Australian Taxation Office’s position in the Federal Court of Australia over its GST demand. The San Francisco-based ride-sharing service filed an application with the Federal Court to challenge the ATO’s GST demand and claims the agency is unfairly targeting its drivers using outdated laws that were written when the ride-sharing concept was non-existent.
Should Tesla accept to sell its autonomous cars to Uber, the latter would finally get rid of all its drivers-related problems.