Zappos CEO Tony Hsieh Wants To Replace Taxis With Teslas In Las Vegas

Tony Hsieh, the venture capitalist and CEO of Zappos, wants to replace the taxis that crawl the Vegas Strip with a fleet of electric vehicles. His latest investment, Shift, started receiving its first shipment of Model S sedans from Tesla Motors, Inc. (NASDAQ:TSLA) last week.

In Nevada, car-sharing services like Uber have been unable to move in because of a state law requiring a $40 minimum hourly rate for livery services. Since Uber cars are “hailed” by users with a mobile app and not streetside hand-waiving, they are considered a livery, or limo service, as opposed to a traditional taxicab.

Shift avoids the Nevada livery law by offering a “single monthly membership,” under which it promises – for a still undetermined price – to send users on their way “in five minutes or less.” Under the plan, Shift allows its members to drive its customized electric vehicles for a certain amount of hours, and picked up by drivers a specific number of times.

"We are a car sharing company that also offers the added benefit of rides. We are not aiming to replace taxis," CEO Zack Ware said in an email to the International Business Times. "Our fleet includes small Smart electric vehicles, Chevrolet Volts and Tesla Model S's. The vast majority of uses by our members will be the members driving themselves (similar to Zipcar)."

Users order a driver from an app, borrow an electric bicycle or take one of Shift’s 100 Teslas for a spin. The number of electric vehicles led to the company’s former name, Project 100, and were “specifically configured” by Shift to operate without a key. Shift also counts a number of Smart cars and Renault Twizys as members of its fleet, and currently has 30 employees, according to Quartz.

Hsieh has invested $10 million in the service as part of his plan to revitalize downtown Las Vegas, and Ware is testing it on a limited basis. Shift is planning on offering a staggered rollout during the fall.

While Uber and Lyft are busy giving taxi associations throughout metropolitan areas across the nation a run for their money, Shift incorporates elements of their business models, as well as the Zipcar approach to car rentals, and a bike-sharing feature for good measure. While tourists might balk at Shift’s monthly subscription, Las Vegas residents may find it more attractive, and it is they who Hsieh is trying to win over with the Downtown Project.

An earlier version of this article incorrectly identified Tesla, as opposed to Shift, as having customized Model S sedans to be used without a key. It also incorrectly stated that Shift's drivers, as opposed to its users, had a set monthly schedule. It has been updated to reflect the corrections, as well as to add an emailed statement from CEO Zach Ware.