In the self-driving car era, Tesla plans to roll out a ride-hailing service that will compete directly with Uber and Lyft according to CEO Elon Musk.
Musk announced his plans on a third-quarter earnings update; Tesla shares soared by more than 12 percent after the company reported better-than-expected profits and positive free cash flow for the quarter.
On a third-quarter earnings call, Tesla TSLA CEO Elon Musk said the company "obviously" plans to jump into ride-hailing in the era of self-driving cars.
"Tesla will operate its own ride-hailing services and compete directly with Uber and Lyft, obviously." Musk said.
Tesla's platform, which is not yet operational, will give customers the ability to "offer their car, add or subtract to the fleet at will," Musk said. Tesla plans to run a company-owned fleet of autonomous vehicles to pick up passengers wherever or whenever there are not enough customer cars to be lent out, he said comparing this service to the peer-to-peer lodgings business of Airbnb.
Tesla, along with the rest of the automotive industry, is racing to develop true self-driving capabilities for its vehicles that go well beyond the company's current Autopilot offering.
Today's Autopilot is a "driver assistance" system that can handle some driving tasks but requires drivers to keep their hands on the wheel at all times. In the second quarter of 2018, Tesla announced that it was developing its own chips to increase the capability of the computer that enables Autopilot features in its vehicles.
Tesla sells a "full self-driving" option to customers who are willing to pay now and wait-- but the option is "off-menu," not listed on the car company's website.
While full self-driving tech is still in development, Tesla's newest Autopilot Navigate features will enable drivers to automatically change lanes, handle forks in the road and take highway exits along a planned route, according to Tesla VP of Engineering Stuart Bowers who spoke on the third-quarter earnings call alongside Musk.
Both Uber and Lyft are expected to go public, potentially next year.
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