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The Network Effect, Robotaxis, & Tesla

The Network Effect, Robotaxis, & Tesla

One of the most interesting technological changes that we are experiencing is the current change in transportation. For close to a century, automobiles have stayed pretty similar to its current state. There is a large amount of disruption occurring recently in the field. Companies like Tesla, Uber, Google, and Lyft have brought Silicon Valley tech to meet with car manufacturing. This article is on network effects and if it is possible to have one company dominate the market as Microsoft, Intel, and Google did in their fields. The front-runner currently is Tesla that has amassed a large database of map and driving data by having its autopilot hardware being used. The future winner still cannot be called as many other companies are planning to enter the autonomous market within the next 3 years. A current prediction from the Institute of Electrical and Electronics Engineers has predicted that up to 75% of cars will be autonomous in 2040. Once one of these companies begins to grow with the popularity a “winner-takes-all” situation could develop.


I was reading about Tesla when I came across this article and decided to use it for my blog post. It is actually highly connected to the themes of this class and the recent sections. In this class, we have learned to see what products end up taking off and about network effects. This article makes the direct connection of analyzing the autonomous car market with exactly “network effects”. The question of how some products come to dominate a market completely through this effect is discussed in this article. The biggest network effect that will come to define the autonomous industry will be not with the cars, but the data being collected. Overall, this article is a great read to understand how current events and analysts are using themes of this course. Network effects are something that companies are trying to understand to take over the autonomous vehicle market. It goes much beyond just solving problem sets that are due on Friday, but will really be key to this autonomous vehicle industry that will lead to billions for the victors. Seeing these connections to the real world is something that both Professor Kleinberg and Easley have done over the semester. This class and even the online version has done a really good job of making connections to industry. It has made the class very enjoyable to see how these theories are being utilized by industry.


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