Tesloop brings Teslas to the masses via blockchain
How the leading blockchain-based mobility project is making electric transportation more accessible
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Rahul Sonnad is cofounder & ceo of Tesloop, a DNA portfolio company, and the first service offering city-to-city shared-car transportation in Teslas. It combines the benefits of an electric, connected, and increasingly autonomous vehicle platform with an intense focus on traveler experience.
The Tesloop vision is now extending with Carmiq — an open-source tokenized software platform that enables collaborative fleet management and its Carma token. Carmiq is designed to create an efficient marketplace for car owners, drivers, passengers, charging providers, parking providers, and repairmen. It does this by enabling frictionless data sharing and economic interactions.
Below, Sonnad explains the Tesloop mission, how blockchain is helping, why he wants to build a multi-sided marketplace, his approach to fundraising, and much more.
What’s going on with Tesloop?
1) The car. It starts with the car. Tesla is a new class of device. It’s a digital transportation device. And there will be tons more soon. The iPhone was the first smartphone and since it came out, every phone has evolved to be like the iPhone. Well, every car is going to be like the Tesla in the next 3-4 years.
2) The data. The second thing is how we are sharing these cars efficiently across people and using the data that comes off the cars to efficiently operate them. For 20 hours a day, most cars are sitting around idle. We put them to use. And the data helps eliminate hassles. For example, we know in real-time when a car’s tires need to be filled with air. That helps us make sure everything is safe and sound.
3) Blockchain. The third thing, as we build Carma, is answering this question: “Why are we going blockchain?” First, you want data from the vehicles — things like tire pressure for drivers, top-speed for insurance companies, miles travelled for mechanics, and the history of the car for potential buyers — to be efficiently shared. Using the blockchain makes sharing that data more efficient. And it lets you create a trusted verification of all the data. It provides transparency that ensures cars are safe, properly permitted, parking fees/tolls are paid, etc.
You also want privacy at the same time. You don’t want your current location told to everybody in the world. You need to verify identity while protecting anonymity. Again, blockchain provides this.
Finally, blockchain mediates the financial transactions between parties. For example, Goodyear may say, “Hey, we’ll pump your tires up with air or rotate your tires after 5,000 miles.” They’ll use the data to know when to do that. Afterwards, somebody has to pay for that. Maybe it’s the insurance company which doesn’t want the risk of an under inflated tire. Maybe it’s the user who wants a smooth ride. Blockchain solves this too and creates an ecosystem for all the participants so there can be incentives, referral bonuses, efficient microtransactions, etc.
Every car is going to be like a Tesla in the next 3-4 years.
Making electric transportation accessible
Our mission: We want to make electric transportation accessible to more people. Right now, it’s very non-ubiquitous. You need to have about $60,000 of cash or credit to get into a real electric car, like a Tesla. Modern, world-class electric transportation is very expensive now if you don’t fractionalize it. As soon as you fractionalize it, it becomes incredibly cheap and accessible to everybody.
As soon as you fractionalize electric transportation, it becomes incredibly cheap and accessible to everybody.
The second thing is to make sure that the transportation system we build is the kind that we want for ourselves, our friends, and our loved ones. It should behave in the kind of way you’d want it to and respect people’s privacy and lives. It should take the time you spend in the car and turn it into a net positive instead of the typical “I got stuck in traffic.”
Sometimes a Tesloop ride is 6-7 hours coming back from Vegas. And passengers think, “I’m so glad I was in the Tesloop because I got all my work done. It was comfortable. My back doesn’t hurt. It was clean. The air was filtered.” It’s a net positive, even though it’s a lot of time. When you go to a Starbucks, you’re not like, “Damnit, I had to be in Starbucks for two hours today.” You’re like, “I was there and I got food, a drink, wifi, I charged my device, and I met a friendly person.” We want to make your car experience as good as your Starbucks experience.
We want to make your car experience as good as your Starbucks experience.
How do we use this car in the best way possible?
Teslas are amazing cars. They’re just completely mind blowing from an operational cost, the programmatic control, the comfort, longevity, low service requirements, etc. So we ask, “How do we use this car in the best way possible?” The answer: Drive it night and day and put as many people in it as you can.
How do we use this car in the best way possible? Drive it night and day and put as many people in it as you can.
That’s what we do. We started our Vegas loop in 2015. And we were running that every day, 17,000 miles a month. Then we went to Palm Springs and did the same thing. We make money on the cars. Comparatively, they’re much cheaper than other options. Our software is getting better. Our revenues are getting higher. Our profits are increasing. And then we’re like, “Okay. We’ve now optimized a handful of cars. But there are 300,000 Teslas out there and there are going to be 300,000 more in a year. How do we optimize all of the Teslas?”
All these cars are sitting around. Let’s get them moving with people in them who are paying and getting transported to places they want to go. And we have hotels, airlines, small companies, and municipalities who manage or want a fleet of cars. They’re super backwards because they aren’t using Teslas. (To us, managing non-Teslas is a little archaic.)
So we ask, “How do we give this functionality to everybody?” And the answer is to create an open-source platform. Let anybody plug in their car, username, and password. Now you know everything about the car. Then you give them the tools to allocate those cars across their staff, if it’s a corporate fleet. And any time they’re not using it, they can allocate it to the public.
That’s what Tesloop is doing. And a way to lower costs is to use all of these cars. We thought, “Let’s allow anybody to put their car in our network. And let’s make that a one-minute process. Then, we can give them the opportunity to share it really efficiently with other people. Maybe it’s their family, maybe their friends, maybe everybody who works at the same company, maybe the public. They can choose.” We decided that’s the product.
And it should be open source because that’s the right thing to do. We don’t want a proprietary network for our future. The infrastructure to run it should be not controlled by anybody.
We’re at the cusp of one of the biggest technological and economic platform changes in history: analog cars to digital cars. That’s a huge shift. Trillions of dollars. And it’s going to happen really quickly — in five years.
We’re at the cusp of one of the biggest technological and economic platform changes in history: analog cars to digital cars. And it’s going to happen really quickly — in five years.
Building a multi-sided marketplace
Uber is a two-sided marketplace. It’s passengers who want to get driven around. Then, on the other side, there are car-owners — who are typically the drivers, car-cleaners, and car-maintainers too.
We’re saying there should be a multi-sided marketplace with no middle man. Then, I don’t have to drive my own car; I can drive any car in the network. Different people can maintain the cars. We can mix and match all this.
Carmiq, as a tokenized mobility platform, is an open-source platform. Anybody can adopt it and use it. It provides the software that lets these parties interact together with no middle man, including insurance providers.
Mobility service providers and tokens
In our system, we’re a “mobility service provider” for passengers. The mobility service provider basically says, “I’m going to guarantee the passenger gets what he/she wants. We’re providing customer service. Guaranteeing a certain ride quality. Determining if there will be food, drink and music. And whether it’s a solo ride or multiple passengers.”
We’re allowing everybody to pay — or receive — their dues. Let’s say I’m an insurance provider. I want transparent data. I want to know how fast the car is going. I want to know if the tires are properly inflated. I want to know if there is a tire-service provider. I want to know, if the tires become under inflated, what is the service-level agreement? Will you drive the car if it’s one pound under inflated? Five pounds under inflated? The token lets the insurance company have a say in this process.
Similarly, passengers pay with tokens to get access to the car. Those tokens are distributed to the insurance provider, the car owner, the car cleaner, etc. There’s a verification process. If the car isn’t clean, the cleaner is responsible for paying a penalty for not performing the job properly.
The token powers the entire market between all these constituents. And these people don’t even need to know there is a token economy. There can be token-to-fiat conversion for anybody who wants it.
The token powers the entire market between all these constituents.
Business first, crypto second
For some companies, all they’re focused on is the blockchain and their token sale. The entire company depends on the token. For us, the business side of the house is more interesting than the token side of the house. The economic efficiencies created by these cars are going to be massive.
The potential is billions and billions of dollars of value created in the very short term. The incremental economic benefit of tokenizing that is a small fraction of the value that’s actually created by the fundamental core technology and marketplace. For us, it’s business first and crypto/economic blockchain second.
Even if the entire cryptocurrency market collapses, that doesn’t really matter that much to us. We’re still selling tickets to San Diego. People still want to rent a car. We don’t have a lot of short-term dependencies on crypto. I think that’s a good thing given the volatility of crypto right now.
Working with DNA
What DNA has done very effectively has been to connect us to really bright people in the space. They’ve connected us to real experts on the blockchain. Those people are very rare and they tend to be really busy.
That’s been a huge value-add — whether it’s potential investors, people who understand tokenomics, developers, etc. They’ve brought us into the center of the ecosystem and helped us find all of the components we need. That would be very challenging independently, especially when we’re running a 24/7 company that operates on Christmas and New Year’s from 5:00 a.m. until 3:00 a.m. every day, 24/7. It’s nice to work with a team that is 100% focused on the blockchain world, which seems to change every three days.
Raising money: Sand Hill vs. blockchain
Today it’s definitely easier to raise money in blockchain than on Sand Hill. Almost any company on Sand Hill, if they’re doing $10 million revenue and they have a blockchain idea, they’ll be able to raise money in the blockchain space if they have a relatively solid plan.
Another reason is there is more talent. I think if you are doing blockchain, you can recruit better engineers. I think there is a lot of incredible engineers. Given the chance to do something blockchainy, they’ll take it. I think a lot of people just view it as a future fundamental technology and want to get into it. That’s really important to be able to recruit great engineers.
Also: If you figure out the perfect blockchain business, it’s a home run. When we talked to traditional investors, they ask: How are you going to beat Uber and Lyft? Those companies have zero cost of capital, massive budgets, and a lot of users. And if you’re not going to beat them, it’s probably not that interesting.
The bar for us in blockchain is different. There, it’s “Is there any blockchain mobility project that’s half as good as you are?” We’re the leading mobility project in the blockchain space. The bar is fundamentally lower than it is for a Sand Hill thing. Whether it should be or not is another question, but that’s how people react.
We’re the leading mobility project in the blockchain space.
Uber is worth $90 billion. If we’re one-tenth as big, it’s $9 billion and we’d be the most successful investment ever in their portfolio. People won’t think like that on Sand Hill though.
With blockchain people, you’re like, “We’re going to build a $9 billion company. It’s blockchain-based mobility.” They’re like, “Great. That’d be amazing. That’d be my best investment.” And they’re super happy about that. There is just a weirdly different dynamic.
Transportation servers
When I stream SoundCloud or Spotify, there are no humans in between me choosing what I want and me getting what I want. There’s some set up that humans have done. But there is no human interaction between me and receiving those bits of music.
Right now, when I order an Uber, there’s a whole bunch of human stuff happening. The driver sees it, he decides if he wants that fare. Then, he goes there, maybe you call him, and he picks you up. Afterwards, he makes a bunch of decisions: “Does my car need service this week or next week? Am I going to get gas right now or am I going to get gas later?” There are a lot of human decisions.
What Tesla has done is build a digital mobility platform. What that will allow us to do is in, let’s say three years of time, when you request a Tesla to pick you up, there will be no human decision or interaction or anything involved with moving you and all your atoms from point A to point B. (Although there may be a person behind the wheel sitting there for legal reasons.) It’s really the first digital, programmatic means to move atoms, outside of Amazon warehouses.
Transportation is being digitized through the Tesla vehicle. Once you have that platform, you can do freight, you can do people, you can create platforms, you can create insurance markets, you can create financing, all of that becomes relatively simple compared to how it works now.
Fundamentally, these vehicles are transportation servers. Instead of living in a cage, they live in the road. Instead of vacuuming them once a month to get the dust out, you vacuum them twice a day. They’re programmatic, queryable, controllable things that provide a utility — it’s just about moving atoms instead of bits. They’re the first “server” that moves atoms at scale.
They’re the first “server” that moves atoms at scale.
