Investor Gary Black of The Future Fund LLC on Sunday predicted that ride-hailing platforms with human drivers would become obsolete in the next five years as autonomous vehicles scale.
The Rise Of Robotaxis
In a post on the social media platform X, Black shared his prediction about what the ride-hailing industry could look like in the near future. “Ride hailing platforms with drivers will likely become extinct within 5 years,” he said, outlining that Robotaxis would become “dominant” in the future.
Black also said that as the sector progresses, autonomous capabilities would “become one of the most popular add-on options” for customers at the time of purchase. He then shared that the future will also see intense competition in the sector.
Tesla’s Role
However, Black lamented at Tesla Inc.‘s (NASDAQ:TSLA) lack of progress in the sector, sharing that the idea that Tesla would alone scale unsupervised autonomy was “borderline head-in-the-sand delusional” as competitors like Alphabet Inc.‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Waymo, WeRide Inc. (NASDAQ:WRD), Pony AI Inc. (NASDAQ:PONY), Baidu Inc.‘s (NASDAQ:BIDU) Apollo Go were “already completing 1.0M paid unsupervised autonomous trips per week.”
He also said that Tesla’s Robotaxi economics cannot be modeled based on factors like trips per day, miles per trip, etc. He then said that a better forecast would be modeling the total addressable market for autonomous ride times Tesla’s market share in said markets, which could provide a more accurate view of demand.
“TSLA may solve for and scale up unsupervised autonomy the fastest of all OEMs but may not capture their share of demand since TSLA doesn't have the skills to communicate with and educate mass consumers,” like did Apple Inc. (NASDAQ:AAPL) with smartphones, he said.
Black also expressed valuation concerns with the stock, saying that “stocks can't sustain multiples of 200x+ EPS or 100x EV/EBITDA unless their franchises are uniquely scalable and unassailable,” adding that Tesla’s current 200x P/E, as well as its forecasted earnings per share growth of +37%, which would illustrate a growth of 5.4x, “doesn't work given PEGs of 2.0-2.5x for other megacap tech stocks.”
He ended the post by outlining his firm’s stance on Tesla. Black said that the EV giant “is a great company with a dominant franchise,” but acknowledged that it had a P/E ratio “that is way too rich.”
Uber’s $10 Billion Robotaxi Bet
Amid the Robotaxi and self-driving push, Uber Technologies Inc. (NYSE:UBER) has reportedly committed nearly $10 billion in investments aimed at bolstering its self-driving prowess in the form of fleet expansions, as well as investments in Robotaxi companies to acquire a stake.
Recently, Uber also launched Europe’s first commercial Robotaxi service, in partnership with Pony AI Inc. (NASDAQ:PONY) and Croatian Robotaxi company Verne, which will serve different areas of the Croatian capital Zagreb initially before expanding to cover the entire city. The service will feature a safety operator onboard before transitioning to a fully autonomous Robotaxi.
Tesla’s Dallas, Houston Launch
The EV giant recently began rolling out its Robotaxi service in Houston and Dallas, offering unsupervised Robotaxi rides in the cities after its initial rollout in Austin last year featured an onboard safety operator for several months before being phased out.
Following the rollout, Investment bank Morgan Stanley analyst Andrew Percoco shared that the launch was a sign of progress for the automaker, amid criticism from investor Ross Gerber of Gerber Kawasaki.
According to Benzinga Edge Rankings, Tesla offers satisfactory Momentum, but poor Value. It provides a favorable price trend in the Long term.
Price Action: TSLA surged 3.01% to $400.62 at market close on Friday, climbing 0.12% further to $401.09 during the after-hours trading session.
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