Larry Goldberg
Managing Partner at LumaSenti, Co-Author of The Decision Model
Uber's ride-hail market will stay tiny until the cost per mile falls from about $3 toward personal-car cost, roughly 77 cents per AAA, and human-driven ride-hail cannot get there at scale. Uber is under 1% of US urban miles, per ARK Invest. @RZ_GreatLakes notes over two-thirds of Uber mileage sits in under 1.5% of US land area. Tesla is the only credible path to profitable national scale at or below that price, and rides near 25 cents a mile would explode the market. x.com x.comÂ
Uber risks a Blockbuster-style squeeze if Tesla builds a cheaper transport network. Unsupervised robotaxis plus private Teslas called in at peak hours would give Tesla the surge capacity Uber pays drivers for, and Cybercab and humanoid delivery could cut costs further. Aggregating other robotaxi fleets only works if they compete on cost, and humanoids threaten Eats. Rides and Eats can generate cash for years, but the multiple should compress first once autonomy looks like a threat to the core. x.comÂ
Tesla's Cybercab may command a premium because it offers a much better ride. It seems to earn over $3 per mile, making Tesla a cash generator for now, though that pricing may not last. Q4 robotaxi miles already appear above Q3 with less than a third of the quarter elapsed; paid miles are tracking for over 3x quarterly growth. Grok roughly estimates Tesla's robotaxi annual revenue run rate at $100-150M versus Waymo's $390-500M; Tesla is on pace to overtake Waymo within months. x.com x.com x.com … Show more
Scaling Tesla's robotaxi fleet to 5,000 could yield a $584 million annual revenue run rate by year-end. The model assumes 24/7 operation, 40 daily rides per vehicle averaging five miles, 70% utilization, and current fares of $3 plus $1 per mile. A 5,000-vehicle fleet by year-end is now the expectation; introducing Cybercabs in other states could keep growth going at its current pace. x.com x.com x.comÂ
Uber's network effects could make it the app robotaxi fleets need to keep their cars fully operational. It is one of the best platforms on earth and a five-year buy at today's valuation, with opportunity too compelling to pass up despite shares falling about 25% in the past year on robotaxi fears. Bookings grew 24% last quarter and trailing free cash flow exceeded $10 billion. Waymo and Tesla could choose to bypass Uber; Waymo already runs its own app in most of its cities. x.comÂ
Tesla's low-cost, high-margin Cybercabs make its Robotaxi opportunity bigger than investors appreciate. ARK estimates each costs about $30K to make and generates $93K a year at roughly 68% gross margin; Tesla is not bullish enough in investors' eyes. Texas registrations show 1,080 Teslas, including 573 Cybercabs, versus 1,207 Waymos; these are registrations, not active rides. Cybercabs already outnumber Model Ys less than two months after launch. x.com x.com x.comÂ
Tesla's robotaxi opportunity is smaller near term than the market priced in because the roughly $60B US ride-hailing market cannot justify the hype. 380,000 unsupervised Q2 miles prove the technology works, but a $300B+ market requires Americans to give up car ownership. Uber and Lyft cost about $2.40 a mile and Tesla's robotaxi about $2.00, versus under $0.80 for a private car. Maintenance, insurance, charging and cleaning eat about 37% of fares, so cutting prices would destroy unit economics. … Show more
Autonomy could expand the ride market tenfold, giving Uber a long growth runway if it does. That is the true 10x opportunity, like ridesharing's expansion of the taxi market. Uber will be a $1 trillion company by 2035. Improved autonomous-vehicle margins are possible but uncertain. x.com x.com x.comÂ
Tesla and Alphabet do not need to destroy Uber to hurt its shareholders; they only need to change the industry's economics. If autonomous vehicles lower cost per mile, pricing pressure follows, so Uber could post record ride volume and still earn less per ride. Uber's fight with Lyft already brought lower prices, incentives and margin pressure; two well-funded rivals with a far lower cost base will fight for the densest, most profitable markets, so assuming Uber's economics hold is aggressive. … Show more
Uber has big long-term secular problems, enough to make even CEO Dara Khosrowshahi's $10M token insider buy a moment to consider shorting, though actually shorting is not recommended. Beyond the Waymo and robotaxi threat, an AI agent that constantly checks every app for the best price would hurt Uber, consistently the highest-priced ride service. Uber would need to lower prices, and it lacks the tech stack. x.com x.comÂ
Uber is decent value because robotaxis will not be a winner-take-all market. Uber has massive investments and projects with Nvidia and will have its own self-driving robotaxis on the road. It trades at about 18 times earnings versus roughly 380 for Tesla, though sentiment will make it a frustrating tug of war for a long time. x.comÂ
Tesla's FSD uptake could add recurring software revenue to its vehicle base, while Robotaxi could earn on each ride. This could be Tesla's most important inflection point, missed amid weak auto profits. North American attach rates rose to 75% from 55% in Q2; subscriptions hit 1.74 million, up 67% year over year, and Cybercab rides began in Austin. Trials may not become lasting paid subscriptions; Robotaxi needs safe operation, steady paying demand and attractive returns at scale. x.comÂ
