Cybercab Day Arrives as Robotaxis Become Bankable

I mean, when I saw one of David Moss's rides in the Cybercab, and he was playing, I think it was Kanye, I was assuming that you were going to lead in with some type of Kanye lyrics or some type of lyrics. So I'm thankful for our listeners' sake that we didn't get a rap opening this week. But look, Cybercab, this is a pretty big event, right? You literally have today in this market more than a few cars throughout the entire OD taking paid rides in a vehicle that has no steering wheel and no brake. And unlike the other vehicle that did this, which was Zoox in Las Vegas, it'll go wherever you want it to go. It doesn't go to six or seven locations. And from what I've seen thus far, it hasn't stopped in the middle of any intersections. I realize that people are always going to try and tear things down. That's fine. It's not at 100 cars, I don't think, yet. So it hasn't hit the milestone that you and I have set to deem that a market's commercial, but like this is a pretty monumental event. I guess it's a little odd that Elon wasn't there, but to make such a big deal that at this whatever event that they had for the influencers among them, that's not the story here. The story is that the Cybercabs are in the market taking paid rides in the full OD. I don't know how you view that other than being a pretty big milestone for autonomy in this country, if not globally.

I don't disagree with you. There was obviously press releases ready to go, media talking points that were sent out. And based on some of the conversations that you and I have had. Yeah. I mean, I get it because that's what fear drives in the market. So look, we'll have to monitor this closely. We'll see how many cars they get there. We'll be in Texas in a couple of weeks and have an opportunity to get in some of those cars in Austin just for context, right? I mean, they hit a million unsupervised robotaxi miles. That's obviously much less than the 200 million that Waymo has, but okay. So what? Like they are now commercial in the market and it's just growth and competition from here. By the way, the number of miles that they put on, where I thought I didn't think that this was going to happen until year end. These guys cranked out 620,000 additional miles in the last six weeks. It sounds like if my math is correct. Maybe my math is off. I'm sure some of our listeners can help me out with that. But since the safety monitors came out, they've put on a lot of miles. And now you look in the market and there's these gold cars everywhere, which by the way is a complete counterpoint to an episode that we did probably over a year ago where we talked about the benefits of not having all of these sensors on the top and not standing out as an autonomous vehicle. These Cybercabs clearly stand out a lot in Austin from what we've seen.

Look, I am not going to, I'm going to stay consistent, I think, with what I've said historically on this podcast about pricing. Like, you cannot draw any conclusions from day one pricing. You don't know if they're generating profit on this. Like, this is not a truly public product yet. So you could have companies that try and price aggressively to send messages or to try and grab share. However, like we did go and see how this car is made. We have a good understanding of the cost of this car relative to where Waymo's cost is and certainly some of the other cars that Uber is partnering with that are in the market and it's substantially lower. Advertised over a half a million or a million miles, right, for a utilization that Uber CEO himself, Dara, has said, you know, the autonomous cars are utilized much higher than a typical human driver. I don't think that's crazy to understand why that's the case. So for where the pricing is today, I think it's interesting, but ultimately, you know, the cost structure of this is much lower. And then the most important thing, Grayson, you've got a cost structure, you got what you price in the market. The most important thing, competition, right? Competition is what drives lower prices and more innovation. So if you go to Austin today, you can get an Uber, you can get a Waymo, and now you can get a Tesla for a robotaxi. And competition is again what makes our country great in terms of the innovation and building business models that are ultimately good for consumers.

Now let's get to the FUD that we were getting pummeled with yesterday. And I think there's, in my dealings with investors, you know, I think there's a fair amount of misunderstanding. I'm not sure where this information is coming from. I'm guessing, I think I know where it's coming from, but I don't know for sure. So let's not speculate. But I think there was a, not to pick on somebody, but sometimes certain people are easy to pick on. In this case, Gene Munster once again with a tweet I think encapsulates what I've been hearing today. This is what he tweets: NHTSA needs a wakeup call. Administrator Morrison, the agency, quote, rained on the Tesla Cybercab launch by opening a probe into Tesla's self-certification. And then there's an em dash. So I don't know if that's AI or he uses em dashes, but anyway, specifically whether a vehicle with no steering wheel or pedals meets federal safety standards. Question for NHTSA: Why slow the rollout of autonomous vehicles when the best data we have say they're seven to ten times safer? Blah, blah, blah, blah, blah. So I think the problem here is that, or the challenge here, and maybe I'll let you because you and Rob have done far more work in this than I have, is like this is like what is expected. Like when you self-certify, it is the job of NHTSA to actually watch what's going on. And then if they have questions, and clearly this is a new vehicle, they're going to have questions, see what's going on. They're not stopping Tesla from doing, they're not slowing down anything. They're seeing how the rollout's going and for good reason. Like the administrator, I think, who's very pro-innovation. You can look at the CNBC clip. I've put it up on my Twitter feed, X feed, if you want to take a look at how he's talked about this, should be focused on, say he's doing his job. That's his job. But at the same time, he's pro-innovation. He's not just going to do a knee-jerk reaction like we've seen from so many other politicians on shutting things down because of the perception of what sensors are needed or whatever other kind of FUD has been pushed out into the market. But again, I'm sorry for going on for so long. Grayson, you and Rob have done much more work on this. What are your thoughts on this tweet and all of this buzz around NHTSA?

All right. So I don't, again, I didn't mean to make Gene the punching bag. He's a very nice person. I've met him many times. He's just reflecting, I think, what's in the investor base. I think there's so many people that are kind of down on Elon for a variety of reasons that are always looking for the negative. And again, we were dealing with this yesterday prior to the launch. Now, look, just to be clear, like if this rollout doesn't go well, right? If these Cybercabs start to get into accidents and aren't acting safely. First of all, I'm just going to assume based on my interaction with both Tesla and SpaceX, this gets back to what I've said many times on this podcast, there's a greater culture of safety at this company than I think anyone gives them credit for. But aside from that, like then yeah, then NHTSA will play a role like they did with Zoox. But again, if this rollout goes well, like, and this could take an evaluation, investigation, whatever you want to call it, days, weeks, months, like you might not hear anything out of NHTSA over that period. Am I getting that wrong or is that your understanding as well?

Yeah, there is a difference in how self-certification works. But again, let's stick to the central message here, which is like an investigation is what it is. That's what they should be doing. That's what all Americans should want them to do. All humans, you want these cars to be safe. And we'll see how this rolls out. And like we've always said, like safety first. It doesn't help anyone. And by the way, NHTSA is doing a favor for the industry, whether it's Tesla or AV Ride, which had its own issues in Dallas and investigations related there in Dallas, or Zoox, which has been, you know, to a certain extent limited. It's a benefit to the industry because you want everyone to be safe. If one of these companies has some major accidents, it's going to impact the ability for autonomy to roll out in any of these cities. So, like, you know, again, Administrator Morrison, everything I've seen, I think he's doing a great job putting safety first. But I don't think that has anything to do with slowing Tesla. If anything, Tesla has been the biggest gating factor on themselves as they've tried to get this technology up to a point where they're ready to go. And by the way, one of the things I noticed on that, to digress a little bit, when I saw some of these influencers that were taking the rides today, the drop-off points were like three minutes to the walk, whatever it was, like it wasn't the exact drop-off point. So I think that might have been the kind of endound on the issues that we've had historically and why we thought this thing was getting held back. The pickup and drop-off points are certainly a challenge for all autonomy companies. And maybe the way they're doing it is they've now identified safe pickup and drop-off locations that might require, you know, a short walk. That's not the exact location that we tried to do in our past rides on Robotaxi and had some issues with.

Whoa. Whoa. Are you going to apologize to my mom for that language?

First of all, I am not on board with you there. They have proven it. For 30 cars in an OD of one market that they've been there for a year. So on one hand I'm going to say like I'm going to pat us both on the back for having open minds where other people have had very closed minds on this topic. And I kind of liked the fact that one of their CTOs that was presenting at this event last night talked about all the experts that were out there that were insisting you needed the thing. So I think, you know, hats off to them. But again, like there still could be like that LiDAR is better. And then as they get into the night or different weather conditions, there's still more learning. That I am going to keep my mind open again, as many people like to denigrate both sides, listening to both sides. But for sure those that are absolutists, and I think you were a little bit absolutist there, I think that's a bit too far for anyone claiming you can't do LiDAR, like we can't do it without LiDAR, whatever. You know, I've got 9,000 miles, I think, now on my FSD versus those with LiDAR where, no disrespect to Waymo, but they have LiDAR, but in the first ride that someone did, I think from one of the journalists that went there, they had two interventions in one trip. We never had two interventions in any trip that we took in a Tesla for the past year since this thing has been launched, let alone in our own FSD vehicles.

I'm going to repeat an analogy that I've repeated in the past because I know you're going to have a listener be like, would you put your child in a car that didn't have the ultimate safety of the LiDAR? So let me just acknowledge, and I'm not even saying that this is true for the Tesla bulls, don't come after me for this, but let's just say for sake of argument that LiDAR adds another level of safety that you don't have from the camera approach. I'm not saying I agree with that, but let's just for sake of this argument assume that that's the case. Okay, but if the robotaxi in Tesla's case with the cameras is still much safer than a human driver, we're really just above where the human driver is. Not to mention all the other benefits relative to where Waymo and Tesla and autonomy approaches. And then okay, getting back to the criticism, how could you put your children there? Like, well, you know, I own a Model Y. I think that's the safest car in the market. Other people will spend for a Volvo, which has been rated the safest car on the market. There's a lot of people that put their kids in cars that are not very high on the ratings of safety. So I say to you, look at your own car and check out where their safety standard or where they rank on the safety of whoever ranks them, Consumer Reports or whatever it is. And I ask you, why are you putting your kids in those cars if it's not the safest car on the market?

Well, it's more than socioeconomic, but because, Grayson, some people are putting their kids in a Porsche, right? And they're driving their kids around in a Porsche. That's not a socioeconomic issue. Do you think a Porsche is safe relative to a Volvo?

Whatever. Well, you know, I don't own one.

Yeah, I mean, I've talked about this on the All-In podcast as well. Whatever. I mean, it is what it is. Let's move on to, there was other news in this day of disappointments, the day of supposed disappointment, which was the mainstream media run on this thing. They also had a thing pop up on their website that said basically come help build the robotaxi network. And they had people submit their names and their companies and whether they were interested in purchasing a fleet of Cybercab mobility hubs or infrastructure. So they're like already on to that next step of not Tesla owning every car, but, you know, I guess you would call this private ownership. It's not necessarily you owning one car, but I'm sure that is part of the process here that they're going to get to. But that was pretty big in and of itself and I think got overshadowed by the event of the Cybercab launching. Can you kind of break it down a little bit more for us?

I don't really think it's going to be a franchise the way you describe it in terms of someone getting effectively exclusive access to a market. I just think that in a market if you want to run 20 cars, they're going to allow you to own and plug into the network for 20 cars. They're not going to allow those same cars to plug into Uber or Lyft network. And I think you start with 20, 30 cars because that's the more efficient way to build this thing out. But what you end with though is what if I just buy one car and for my car, there's no steering wheel in this thing. It's going to be my personal usage and so anything that's on the network is free to me and then I can plug it into the network for usage at night. So then you address this issue that a lot of people have brought up in terms of like, oh, what do you do in the peak hours? How do you have to have a fleet of X to handle it for the peak hours? Well, if you have private ownership even on an individual car basis where someone can use that car during the day and then turn it out to the network at night, that becomes your peak hour. Now, someone might argue like, well, how's that going to work? Someone's going to want to use their car. It's the same concept as that exists today with Uber. Like, where do you think those Uber drivers are doing? They're not using their cars at the peak hour. They're actually out there being workers in those peak hours. So it's effectively the same concept. You own an asset, in this case, one that's probably less than $30,000, right? So depending on what type of car that you're getting from Uber, typically higher than that, at least the cars that I take, maybe not on the Uber X level, that is now a revenue generating asset for you as well as your own personal autonomous vehicle.

That's what we do here. I mean, we're the truth detectives or the inspectors, whatever term you want to use, but you're right. It is going to be a slow, gradual rollout, which goes back to what you and I have said for a long time and we get a lot of flack for it. Tesla fundamentally cares about safety. And I want to leave you with that as we go on to the next section. Tesla fundamentally cares about safety.

All right. So the next thing is I'll give Financial Times credit. I think this was a strategically timed release of this article which really wasn't new news. It was a bit of a rehash with some additional quotes, including from Uber themselves, which was a little surprising, honestly. But just talking about how they're pushing on lawmakers in Jersey and DC. And this again is something we've talked about here before on this podcast that human drivers have to be 85% of rides during this three-year pilot. Obviously this could be restrictive to autonomous companies. And it's what we call regulatory capture. In Uber's own policy paper that they used to support this, this was published back in May of '26, they actually conceded that driver utilization and hourly earnings are already declining in San Fran and LA. Which is interesting, right? Because didn't we see on Twitter a lot of reports pushing how, oh, there's no impact on us in San Fran and LA. And yet part of the argument here is that the hourly wages are down. I think there's a Gridwise analytic study of some AV active cities where hourly wages were dropping 3 to 6% year-over-year in San Fran, LA, Austin, and Phoenix while rideshare markets without robotaxis had a slight pay increase. But even Uber's own policy paper said driver utilization and hourly earnings were already declining. So which is it? Are they having no impact on you in the market or are they having impacts on your market? And is this reaction of regulatory capture a bit over the top? I mean, even in this article, Uber COO Andrew Macdonald, Mac, we love the guy, I think he does a great job at Uber, acknowledged that this stance did look strange. He called it ironic. He literally called it ironic, right? Why? Because of how Uber entered the market. They entered the market, they grabbed their share, their 80% share, whatever, 70, 80% share, whatever it is. Now they want to capture that through these regulatory walls. I mean, if I was Rip Van Winkle and I went to sleep and I came back, I'd be questioning everything that's happening with Uber. First they wanted to fight the man being the taxis and the unions. Now they want to be the man.