Tesla Got a Permit to Operate a Taxi Service in California—but There’s a Catch

Tesla has been granted a permit to operate a taxi service in California, a spokesperson for the California Public Utilities Commission, a state regulator, said Tuesday. It marks the first step towards Tesla’s and CEO Elon Musk’s vision of operating a driverless taxi service in the state.

One day, Musk has said, Tesla owners should be able to rent out their cars as sort of self-driving Ubers while they’re not using them. He has said current owners should be able to operate their Models 3 and Y autonomously in the state later this year—a plan that faces both technological and regulatory hurdles.

But despite the permit, Tesla’s driverless taxi future still seems far off in California, which has the perfect climate for self-driving cars but some of the strictest regulatory requirements in the US for testing and operating them. The permit does not allow Tesla to transport passengers in driverless cars; CPUC spokesperson Terrie Prosper says that the electric carmaker did not apply for its autonomous vehicle programs. Tesla wouldn’t be granted such a permit anyway, because it first needs to receive permission from another state regulator, the Department of Motor Services, to offer driverless rides. (The DMV confirmed to WIRED that Tesla has not applied for the necessary permits.)

The new permit does allow Tesla to operate a taxi service comprising vehicles with drivers, who will be Tesla employees, according to the CPUC. Initially, the regulator says, Tesla will use the permit to take only Tesla employees on prearranged trips, though it plans to eventually give rides to members of the public.

Tesla did not immediately respond to a request for comment about the permit, or its future driverless plans in California.

Four companies, including Amazon’s Zoox, hold permits allowing them to operate some kind of driverless service pilot in the state, though two of those companies are only permitted to offer rides with a driver behind the wheel. Only Waymo operates driverless taxis in California. The Google sister company, which took a longer and more cautious approach to self-driving service, spent more than a decade moving from testing early versions of its driverless technology on public roads to running a paid robotaxi service in Phoenix, Arizona. Today, Waymo operates service in four cities: Phoenix, San Francisco, Los Angeles, and Austin.

Tesla has explored launching a driverless taxi service in at least Palo Alto, Palo Alto Online first reported last year. Emails later obtained by WIRED show that, by late October of last year, Tesla Autopilot head Ashok Elluswamy was negotiating with city council and staff members over how to pull off such a service. Tesla had hoped to launch by taking over the same permit used by another company, Via, that provided shuttle services in California. Eventually, according to the emails, the automaker concluded that it had to apply for its own permit.

A spokesperson for the City of Palo Alto did not immediately respond to questions about how the new permit might affect robotaxi plans in the area.

Musk said earlier this year that Tesla plans to launch a driverless taxi service in Austin, Texas, this coming June. (Unlike California, Texas has no strict rules around autonomous vehicle operations.) Last fall, the automaker showed off a prototype of its “Cybercab,” a two-seat, purpose-built robotaxi, which it said it would begin to produce in 2026.

Whatever happens in Texas this year, Musk and his company have already missed a few deadlines. In 2019, he said the automaker would have 1 million robotaxis on the road by the following year.