Tesla says it will roll out Uber-style ride services program

Thu Oct 20, 2016 5:36pm EDT
 
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By Alexandria Sage

SAN FRANCISCO (Reuters) - Tesla Motors Inc (TSLA.O: Quote) is planning to roll out a ride services program and will announce details next year, the luxury electric vehicle maker said on its website, a service first outlined by Chief Executive Elon Musk in his master plan in July.

News of the Tesla Network was in a disclaimer about the self-driving functionality on new Model S vehicles. Musk said on Wednesday Tesla is building new vehicles with the necessary hardware to eventually enable full autonomy, although the software is not yet ready.

"Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year," read the disclaimer.

Tesla did not immediately respond to a request for more detail.

Car makers have rushed to invest in so-called mobility services, hoping to capture the potential trillions of dollars in revenue from selling both vehicles and such on-demand services, while carving out a stake in the industry dominated by Uber UBER.UL.

Barclays analyst Brian Johnson wrote in a note to investors on Thursday that although a Tesla Network could "excite the market" over its potential earnings stream, it was a costly proposition.

"While we think ride-sharing/hailing is the future of mass-market mobility, we have some financial concerns with the idea of an OEM-owned fleet," Johnson wrote.

Venture capitalists and corporate investors had poured nearly $28 billion into the ride services sector in the past decade as of June, according to a Reuters analysis.   Continued...

 
A Tesla logo hangs on a building outside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson/File Photo