Billionaire Elon Musk’s most ambitious robotaxi project is set to disrupt New York City (NYC) after making inroads in Austin, Texas. This puts the future of the legacy yellow taxis in NYC in jeopardy. Tesla (TSLA) has not yet applied for all the permits required to roll out or test its robotaxis in the city, but the company has started hiring test drivers, according to job openings on its website. These test drivers will be responsible for driving the robotaxis and “conducting dynamic audio and camera data collection for testing and training purposes.”
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As Tesla prepares to enter NYC streets, traditional yellow taxis are expected to suffer, as there are several benefits to an autonomous ride-hailing service compared to a normal manned taxi service. Rivals Uber (UBER) and Lyft (LYFT) are already offering stiff competition to yellow taxis in the city by providing cheaper rides.
Tesla’s robotaxis are expected to offer even greater advantages, as CEO Musk has stated that regular owners can put their Teslas to use as robotaxis when they are not using them for personal purposes.
Here Are the Benefits of Tesla’s Robotaxis:
- Robotaxi rides cost less per trip because they do not require drivers or the related expenses of salaries and benefits.
- Robotaxi owners will not have to purchase medallions, which are government-issued metal licenses attached to the hood of yellow cabs, giving the legal right to operate a taxi in NYC. The number of medallions is limited, and they can sometimes cost as much as $200,000.
- Research indicates that owning a Tesla for robotaxi use could help owners earn up to $50,000 annually in passive income.
- Tesla’s Full Self-Driving (FSD) technology has proven to be safer and more efficient than human drivers, and it is expected to continue improving over time.
- Tesla’s robotaxis are already offering cheaper rides than Uber and Lyft in Austin, and they could continue this trend in NYC as well.
- Robotaxis can operate 24/7 as there are no drivers and no required breaks. They only need to halt for charging.
- Tesla aims to rapidly scale the number of robotaxis, which would mean more vehicles available for hire and shorter waiting times for passengers.
- Tesla’s robotaxis have some cool features that keep riders engaged, such as app-based controls for temperature, music, and entertainment, along with a rear-seat screen for passengers.
Overall, autonomous ride-hailing vehicles are reshaping the entire transportation experience. Most importantly, these vehicles are helping NYC achieve its climate goals. The city plans to transition its entire city-owned fleet to electric vehicles by 2027.
Is TSLA Stock a Buy, Hold, or Sell?
On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 15 Holds, and eight Sell ratings. The average Tesla price target of $307.23 implies 9.5% downside potential from current levels. Year-to-date, TSLA stock has lost nearly 16%.
