Elon Musk on Thursday unfolded his vision for robotic cabs and self-driving cars. Investors reacted with disappointment on Friday, and Tesla shares fell as much as nine percent. Whatever else you may think of him; Musk's long-term vision of urban mobility is becoming increasingly relevant. With urbanization, declining car ownership and working from home, a future of shared transportation, preferably on demand, is coming ever closer.

Source: Tesla video
Singapore relentlessly carless Last week I was in Singapore for Tech Week, one of the world's most futuristic cities, where Electronic Road Pricing (bill driving) has been working just fine for years and just the permit to buy a car costs a minimum of seventy thousand Euros. Singapore understands that a city-state of six million people simply cannot accommodate much car traffic and acts accordingly. Only 14% of the population owns their own car. Due to various taxes and duties, the price of a small Toyota easily exceeds two tons. Old cars are non-existent, as the permit is valid for only ten years. It is hell for a car enthusiast. Public transportation in Singapore, on the other hand, is fantastic: spotless, spotlessly clean and extremely safe, with air-conditioned buses and subways that run every three (!) minutes during rush hour. The understandable lament of a Singaporean cab driver, who sometimes pays up to a hundred dollars a day for the rental of his cab on a turnover of a hundred and fifty dollars, made me extra fascinated by the picture of the future that Musk outlined Thursday at the Tesla event "We, Robot" at Warner Brothers studios in Los Angeles. The Verge produced a six-minute recap. Cybercab and Roboofen The highlight was the unveiling of the Tesla Cybercab, a fully autonomous robotic cab with no steering wheel or pedals, because there is no driver: everyone is a passenger. The Cybercab is positioned as an affordable solution under $25,000, but even the most inveterate Tesla fanboy doesn't believe that price will work. |

Source: Tesla video
In addition to the Cybercab, Musk also presented plans for autonomous versions of the Tesla Model 3 and Model Y, with hopes that these vehicles will hit the market by 2026. (Musk himself said "expectation," but my ears translate that directly from Elon Musks to "hope.") Surprising was the introduction of the Tesla Robovan (pronounced, according to Musk: Robooofen), a small bus shaped like a clunky iron, which can seat 20 people.
Cars 6% in use
In Musk's ideal picture, buyers would "rent out" their Tesla Cybercab or Robovan to the community as soon as they don't use it themselves. Since people use their car less than 6% per week on average, the Sacred Cow would be able to recoup its investment the remaining 94% of the time.
This may sound strange now, but who remembers when cab drivers in Europe gleefully orated that Europeans would never drive their own cabs in their Prius and that even if it happened, we exalted Europeans would never get in the car with amateurs? The skepticism against a new form of transportation will disappear very quickly the moment the Cybercab shows up quickly, the rides are safe and the price is comparable or lower than that of an Uber.
Disappointment among investors
Despite Musk's ambitious presentation, investors were not enthusiastic. Among analysts, disappointment prevailed over the lack of concrete details about planning, expected costs and potential sales for Tesla.
This reluctance among investors reflects a broader problem facing companies like Tesla. Investors often base their expectations on quarterly results, whereas Musk has a long-term vision, possibly as much as 30 years ahead, to change the world with innovative technologies. SpaceX is another example of that approach.
Musk runs Tesla like a startup
What many investors seem unwilling to understand, however, is that Musk runs his companies like startups. This means he focuses on long-term growth and value maximization and often opts for short-term tactical improvisation.
This is normal for startups that have not yet found a complete product-market fit, with apologies for the crassness. In this, Musk's approach differs fundamentally from the traditional approaches of publicly traded companies, where predictable quarterly numbers set the company's course.

For many investors, this approach is difficult to accept, especially when faced with short-term losses or delays in product launches. Musk's long-term vision - aimed at a world in which shared autonomous vehicles dominate urban transportation - may ultimately bring about a radical transformation of the mobility sector.
Investors in Tesla should not whine, because everyone knows by now that buying a stock in an Elon Musk company is more like a roller coaster ride than a ride in a gently buzzing Tesla.
2050: global urbanization
Musk's vision of robot cabs should be seen within the broader framework of urbanization, a trend that will only increase in the coming decades. By 2050, it is estimated that nearly 90 percent of the population in the US, over 80 percent in Europe and nearly two-thirds of the population in Asia will live in urban areas.
This urbanization is driven by the growth of megacities, where the demand for efficient shared mobility solutions such as robot cabs and self-driving vehicles will rapidly increase. The current model of private car ownership is becoming less and less sustainable and realistic as cities become more densely populated. This is where Musk's vision of robot cabs and shared mobility can play an important role.
From parking lot to park
By introducing autonomous vehicles, cities can not only relieve their traffic infrastructure, but also create new opportunities for more efficient use of urban spaces.
One notable aspect of Musk's presentation was his vision for the reuse of urban spaces. He suggested that parking lots in cities could be turned into recreational areas because robot cabs do not need long-term parking spaces: after all, they drive continuously.
Instead, these vehicles could be summoned via apps, similar to current services such as Uber, Lyft and Grab, but without human drivers.
Car ownership in large cities declines
Car ownership in large cities continues to decline, partly due to high costs and available public transportation. In cities such as Amsterdam, only 22% of households own a car, compared with 27% in Paris.
Even in cities such as New York and London, where car ownership is higher (around 53% and 56%), private vehicles are becoming less and less necessary due to the presence of good public transportation and alternative mobility options such as ride-sharing. However, in cities such as Los Angeles, where car ownership is still around 94%, awareness of the disadvantages of private car ownership is also beginning to penetrate, especially because of traffic congestion and the high cost of parking.
American cities, unlike Singapore, Seoul and Tokyo, for example, lack good public transportation, and it is precisely then that shared car ownership, or transportation on demand as Musk suggests, could catch on even faster.
Unexpected impact of working from home
Another important aspect contributing to the change in urban mobility is the rise of working from home. Since the pandemic, working from home has increased by a factor of five and is now a regular part of daily life for millions of workers worldwide.
This has not only led to a decrease in commuting (and thus traffic congestion), but has also impacted the labor market, especially for groups that previously struggled to find work, such as women and people with disabilities.
The number of disabled workers in the US has increased by two million since the pandemic, largely due to the ability to work remotely. The percentage of working women in the US has also increased faster than that of men, attributed in part to the greater flexibility that working from home offers in combining work and care responsibilities. These figures provide evidence that women are both working and raising children, which makes one wonder what men are doing.
Home work sometimes horizontal work
One surprising consequence of working from home, by the way, is its potential impact on birth rates. In countries in East Asia, where long working hours and intense pressure in parenting have led to declining birth rates, working from home seems to offer parents more flexibility in combining work and parenting.
This could lead to a slight increase in birth rates, with preliminary analyses suggesting that couples who work from home at least one day a week may want an additional 0.3 to 0.5 children. In countries such as Singapore, with aging populations and low birth rates, a higher number of children per family is encouraged by the government.
Shared mobility is the future
Given increasing urbanization, the rise of working from home and the rising cost of car ownership, shared mobility is becoming increasingly logical. In cities where car ownership is declining and the use of space is changing, a model of shared cars or cars on demand offers a sustainable alternative to traditional car ownership.
Of the 10 words Elon Musk utters these days, or pours out on X over us, 11 should be taken with a hefty grain of salt. But Musk's vision of robotic cabs fits seamlessly with global developments that governments will only encourage.
The success of Airbnb suggests that enough people have little problem renting out their property at the right price. There is no reason to believe this will be any different with cars - self-driving or otherwise.

Musk is likely to play a role as a forerunner with his self-driving cars, which will then be overtaken in the mass market by other players. Just as is happening now with Tesla, which faces competition from Chinese manufacturers and the traditional automakers. Waymo and Cruise are just the first. Perhaps a cause for concern for Tesla investors, but good news for everyone else.