Remember all that buzz earlier this week when Elon Musk hinted at expanding Tesla’s budding robotaxi service to the San Francisco Bay Area and other U.S. markets during an earnings call? Well, it looks like California regulators have a few things to say about that. They’re making it quite clear that Tesla isn’t actually authorized to carry passengers on public roads in autonomous vehicles, and if they do, there must be a human driver in control at all times.
The California Public Utilities Commission (CPUC) sent an email to CNBC on Friday, stating definitively, “Tesla is not allowed to test or transport the public (paid or unpaid) in an AV with or without a driver.” They clarified, “Tesla is allowed to transport the public (paid or unpaid) in a non-AV, which, of course, would have a driver.” So, for now, it seems Tesla’s service in California will be more “taxi” than “robot.”
Understanding Tesla’s California Permits
It turns out, Tesla holds what’s called a charter-party carrier permit in California. This essentially allows them to operate a private car service with human drivers, much like limousine companies or sightseeing services. The CPUC mentioned they received a notification from Tesla on Thursday indicating the company plans to “extend operations” under this permit to “offer service to friends and family of employees and to select members of the public” across much of the Bay Area. But, as the CPUC reiterated, this service can only be with non-AVs under their current permit.
The California Department of Motor Vehicles (DMV) also chimed in, telling CNBC that Tesla has had a “drivered testing permit” since 2014. This permit allows them to operate autonomous vehicles (AVs) as long as a safety driver is present, but it specifically prohibits collecting fees for these rides. Plus, those safety drivers have to be Tesla employees, contractors, or designated by the manufacturer.
What’s Happening in Austin and Beyond
Meanwhile, in Austin, Texas, Tesla is currently testing out a robotaxi service. They’re using their Model Y SUVs, which are equipped with the company’s latest automated driving software and hardware. This limited service operates only during daylight hours, in good weather, and on roads with a speed limit of 40 miles per hour. These Austin robotaxis are remotely supervised by Tesla employees and even include a human safety supervisor sitting in the front passenger seat. For now, this service is just for invited users who are part of Tesla’s “early access program.”
On Friday, Business Insider, citing an internal Tesla memo, reported that Tesla told staff it intended to expand its robotaxi service to the San Francisco Bay Area this very weekend. Tesla didn’t comment on that report.
California’s Ongoing Regulatory Scrutiny
In a separate but related matter in California, the DMV has actually accused Tesla of misleading consumers about the capabilities of its driver assistance systems. These were previously marketed as “Autopilot” and “Full Self-Driving” (FSD). Tesla now calls its premium driver assistance features “FSD Supervised,” and in their owner’s manuals, they clearly state that Autopilot and FSD Supervised are “hands on” systems, meaning a driver needs to be at the wheel, ready to steer or brake at all times. However, user-generated videos shared by Tesla on X have shown customers using FSD completely hands-free while doing other tasks. The DMV is arguing that Tesla’s license to sell vehicles in California should be suspended, and arguments on this are still ongoing at the state’s Office of Administrative Hearings in Oakland.
Local Concerns About Transparency
Under California state law, autonomous taxi services are regulated at the state level. Interestingly, some city and county officials on Friday said they were completely out of the loop regarding a potential Tesla service in the state. Stephanie Moulton-Peters, a member of the Marin County Board of Supervisors, shared in a phone interview that she hadn’t heard anything from Tesla about their plans, urging the company to be more transparent. “I certainly expect they will tell us and I think it’s a good business practice to do that,” she said. Moulton-Peters, who is undecided on robotaxis generally, wasn’t sure how Marin County, located north of San Francisco, would react to Tesla’s service, noting, “The news of change coming always has mixed results in the community.”
Another Marin County Board of Supervisors member, Brian Colbert, said in an interview that he’s open to the idea of Tesla’s service being a positive thing but was disappointed by the lack of communication. “They should have done a better job about informing the community about the launch,” he said.
It’s worth noting that Alphabet’s Waymo, which is quite a bit ahead of Tesla in the robotaxi market, obtained numerous permits from both the DMV and CPUC before launching its driverless ride-hailing service in California. Waymo was granted a CPUC driverless deployment permit in 2023, allowing it to charge for rides in the state, and has been seeking amendments to both its DMV and CPUC driverless deployment permits as it expands its service territory.
It seems like Tesla has some significant hurdles to clear if it wants to truly bring robotaxis to California anytime soon!