Tesla (TSLA.US) to launch autonomous ride-hailing service next year? Musk's vision faces major regulatory challenges
1min read Elon Musk, CEO of Tesla (TSLA.US), said on Wednesday during a conference call that the company would launch a public self-driving ride-hailing service in California and Texas next year. Musk said: "We think we'll be able to have a paid-for Tesla self-driving car service next year."
However, Musk's promise could face major regulatory hurdles. In California, Tesla is expected to face tough challenges in obtaining the permits it needs to provide full self-driving services to paying customers. Alphabet's (GOOGL.US) Waymo autonomous driving unit spent years and millions of miles of testing before it received the first permit from the California Public Utilities Commission, which regulates ride-hailing services.
The California Department of Motor Vehicles, which regulates autonomous vehicle testing and deployment, previously said that while Tesla has held a license to test autonomous technology with a human safety driver since 2015, it has not reported using the license since 2019. The agency also said Tesla has not applied for a license to test autonomous vehicles without human drivers.
Musk acknowledged the potential regulatory challenges in California, saying "it's not something we have total control over." But he added: "I would be surprised if we didn't get approved next year."
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, a Tesla shareholder, said: "Dealing with regulators is a very difficult process, and no one should think it's as easy as 'going for a walk in the park'."
Mary "Missy" Cummings, a professor of engineering at George Mason University and a former National Highway Traffic Safety Administration adviser, said: "I think the bigger problem is the state licensing." She has been a critic of Tesla's Autopilot driving assistance feature. She added that "they're still going to need several years" before they can get the necessary permits in California, after Tesla provides testing data to the state.
By contrast, Texas has much lower regulatory requirements for autonomous vehicles, but companies typically test for months or even years before deploying a paid ride-hailing service.
Regulation of autonomous vehicle deployment is largely left to the states, and Musk said during the conference call that there should be a "national process for approval of autonomous vehicles."
