A vehicle Tesla is using a robotaxi test purposes on Oltorf Street at Austin, Texas, US on Sunday, June 22, 2025.
Tim Goseman | Bloomberg | Getty images
This week in an earning, Tesla CEO Elon Musk teased the expansion of its company’s flooding robotaxi service in San Francisco Bay Area and other US markets.
But California regulators are clear that Tesla is not authorized to carry passengers on public roads in autonomous vehicles and will require a human driver to control all the time.
“Tesla is not allowed to test or transport the public (payment or unpaid) in an AV with or without a driver,” the California Public Utilities Commission on Friday told CNBC. “Tesla is allowed to transport the public (payment or unpaid) into a non-AV, which will definitely, a driver.”
In other words, Tesla’s service in the state should be more taxi than robots.
Tesla is known as a charter-party carrier permit in California, which allows it to run a private car service with human drivers similar to the services of limosene companies or sightseeing.
The Commission said it received a notification from Tesla on Thursday that the company planned to “expand operation”, which “to serve the employees and family and to” select the members of the public “in most parts of the bay area”.
But under Tesla’s permit, this service can only be with non-AVS, CPUC said.
The California Department of Motor Vehicles told CNBC that Tesla has “conducted a driver test” since 2014, allowing the company to operate AVS with a security driver, but not to collect fees. DMV stated that security drivers should be a Tesla employee, contractor or designer under that permit.
In Austin, Texas, Tesla is currently testing a robotaxi service, using its model Y SUV equipped with the company’s latest automatic driving software and hardware. Limited service operates on roads with a speed limit of 40 mph during daylight and in good weather.
Robotaxis in Austin is supervised by Tesla’s employees, and the front passenger seat consists of a human safety supervisor. This service is now limited to invited users, which agree with Tesla’s terms of “Early Access Program”.
On Friday, Business Insider cited an internal Tesla Memo that Tesla told the staff that it plans to expand its robotaxi service in the San Francisco Gulf area later this week. Tesla did not respond to the request of the comment on that report.
In a separate case in California, DMV has accused Tesla to misleading consumers about the abilities of its driver support systems, who were previously marketed under the name Autopylot and Full Self-Driving (or FSD).
Tesla now calls its premium driver support features, “FSD supervised.” In the manual of the owners, Tesla says that the autopylot and FSD supervision is “on the system”, which requires a driver on the wheel, is ready to steer or break at all times.
But in a user-based video shared by Tesla on X, the company shows customers using FSD hands-free engaged in other tasks. DMV is arguing that Tesla’s license to sell vehicles in California should be suspended, with the argument on Friday at the state administrative hearing office in Oklaland.
Under the California State Act, autonomous taxi services are regulated at the state level. Some city and county officials said on Friday that they were out of the loop about a possible Tesla service in the state.
Stephanie Moulton-Pieters, a member of the Marin County Board of Supervisors, said in a phone interview that he had not heard of his plans from Tesla. He urged the company to be more transparent.
“I definitely hope that they will tell us and I think it is a good business practice,” he said.
Moulton-Peters stated that she was usually unspecified on robotaxis and was not sure that Marin County, north of San Francisco, would react to Tesla’s service.
“The news of the change of change always has mixed results in the community,” he said.
Brian Colbert, another member of the Marin County Board of Supervisors, said in an interview that he was open to the idea of Tesla’s service, but was disappointed with the lack of communication.
“They should have done a better job about informing the community about the launch,” he said.
Alphabet Weso, which is far ahead of Tesla in the robotaxi market, received several permits from DMV and CPUC before starting its driver’s ride-having service in the state.
Waymo was awarded the CPUC driverless perfect permit in 2023, allowing it to charge for riding in the state. The company is demanding amendment in both its DMV and CPUC Driverless Permit Permit as it expands its service sector in the state.
– David Ingram of NBC reported from San Francisco.
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