AI Disruption Is Coming: Example of Robotaxis

In recent weeks, I've listened to several podcasts analyzing Tesla's Robotaxi initiative, which serves as a compelling proxy for how transportation costs are set to decline sharply, even as it disrupts livelihoods for many Americans.

‍

As of November 3, 2025, Tesla's Robotaxis are operational in Austin, Texas, and the San Francisco Bay Area, with plans to expand to 500 vehicles in Austin and 1,000 in the Bay Area by year's end. Early reports indicate a 75-80% reduction in costs compared to Uber.  For instance, a $20 Uber ride to the airport could drop to $4-5 in a Tesla Robotaxi. This exemplifies technological price deflation in real time. With approximately 8 million Uber drivers worldwide, the question arises: Can Uber remain competitive in 5-10 years, once Robotaxis scale broadly and public apprehension toward autonomous vehicles wanes?

‍

On the path to full scale, Tesla can produce these vehicles for $10,000-15,000 less than standard retail models, eliminating components like dashboards, steering wheels, and pedals. From there, the cars operate continuously, serving passengers around the clock. Notably, every Tesla currently on the road is equipped for Robotaxi functionality, with the requisite cameras and computing hardware already integrated.

‍

Elon Musk recently stated in an interview that the company's shifting focus from vehicle production to refining logistics and fleet-management software. Considerations include optimal parking for idle Robotaxis during low-demand periods and avoiding congestion at Superchargers. Developing a robust app for real-time tracking, dynamic pricing, and booking (akin to Uber's interface) will also be essential.

‍

That said, the transition carries significant risks, as previously noted: Millions of jobs may disappear. In my assessment, this technological deflation will likely exacerbate fiat currency inflation, as governments intervene with support for displaced workers. The net effect on overall prices remains uncertain; yet the broader disruption is unmistakable and profound.

‍

AI's deflationary momentum is accelerating, promising in its efficiency, but demanding careful societal stewardship to mitigate its toll on everyday workers.  I can’t believe I sound like half a Luddite and half a technologist. I remain eager to see AI’s impact to the economy and overall optimistic on its deflationary nature.

‍

Thank you for reading. Please review our disclosures.

‍