No Mention of Robotaxi as Tesla Launches Ride-Hailing in San Francisco

Tesla launched a ride-hailing service in the San Francisco Bay Area on Thursday, without indicating whether it would be using self-driving vehicles that power its Austin, Texas operations.

California has not permitted Tesla to offer robotaxi service, and the limited rollout highlights the regulatory hurdles the company faces as it looks to pivot to robotaxis amid cooling electric vehicle sales.

The state’s rules could potentially delay Musk’s target of deploying robotaxis across half the U.S. by year-end.

The California Public Utilities Commission (CPUC) said last week that Tesla was not allowed to “test or transport the public” with or without a driver in a self-driving vehicle.

Tesla had notified the CPUC of its intent to include friends and family of employees, plus select public participants in the Bay Area service, but only in human-operated vehicles.

But the regulator reiterated that Tesla must first complete a pilot phase without charging customers before pursuing full-autonomous permits, a process that has taken competitors such as Alphabet’s Waymo years to navigate.

“You can now ride-hail a Tesla in the SF Bay Area, in addition to Austin,” Musk said in a post on X, without adding other details.

Tesla, in a post on X, showed the service area would include the San Francisco area, San Jose and Berkeley.

The company only has a permit from California’s Department of Motor Vehicles to test self-driving vehicles with a safety driver on public roads. It does not have the permits needed to collect fares in robotaxis.

For the Bay Area service, Tesla may be able to use its Full Self-Driving (Supervised) feature, which can perform many driving tasks but requires a human driver to pay attention and be ready to take over at all times.

A CPUC spokesperson last week did not respond to a question on whether Tesla could use that feature, but such technology does not require an autonomous vehicle permit in California because the human driver is expected to be in control at all times.

Last month, the company launched its robotaxi service in Austin with a safety monitor in the front passenger seat, but conditions under which Tesla could be allowed to operate the service in the Bay Area would require an employee at the wheel at all times, to take control of the vehicle when needed.

Tesla, whose shares were down nearly 2% on Thursday, did not immediately respond to a Reuters request for additional details.

The EV maker will require additional permits from the CPUC and California’s Department of Motor Vehicles to launch a paid robotaxi service competing with Waymo, Uber and Lyft, though the regulatory approval process is lengthy and can stretch for years.

Tesla’s launch pits the company against Waymo on its home turf. The Alphabet unit surpassed Lyft’s market share in San Francisco this year, making it the city’s second-largest ride-hailing provider behind Uber, according to data from analytics firm YipitData.

Musk said last week that Tesla was aiming to get the regulatory permission to launch robotaxis in several states, including California, Nevada, Arizona and Florida, but did not provide details on the approvals it was receiving.

(Reporting by Rajan, Sriram and Kaur in Bengaluru; Editing by Nivedita Bhattacharjee and Shinjini Ganguli)