By Malena Carollo
CalMatters

Tesla Inc. received permission from state regulators this week to begin a charter service that will use Tesla-employed drivers to ferry its employees in company-owned vehicles for prearranged rides, a step toward its plans for driverless Tesla taxis.

The California Public Utilities Commission, one of the state regulators that oversees hired vehicles, granted Tesla approval for what is known as a “transportation charter-party carrier” permit on Tuesday, acting on a November 2024 application from the company.

The permit does not allow Tesla to operate a rideshare service like Uber or Lyft, nor does it give Tesla permission to run driverless taxis. And Tesla hasn’t applied for permitting for either of those functions.

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“The only reasonable explanation I can come up with for why they’ve got this (permit) is to allow them to test some of the operational backend services required to run a mobility service,” said Sam Abuelsamid, vice president of market research at communications firm Telemetry and an auto industry analyst.

To eventually provide rideshare services – with or without a driver – Tesla would need software that allows riders to request a ride, send out a vehicle to meet them, and take that rider to their destination. This charter service permit, Abuelsamid said, may be a way for the company to test out this kind of software.

Tesla did not respond to emailed questions.

Tesla’s application, which the CPUC did not provide to CalMatters as of publication time, referred to transporting its employees as its “initial” use for the permit. It is not clear where in California the company would run the charter service. The company did not respond to a question regarding the operating location or what it expects to use the permit for after initial use.

Long Regulatory Road for Driverless Taxis

Deploying driverless taxis to the public is a long regulatory road. The company would require permits from both the utility commission and the California Department of Motor Vehicles, which oversees safety for such rides. Among the required steps are testing unpaid rides with a safety driver, paid rides with a safety driver and paid rides with no driver at all.

Waymo currently offers driverless rides to the public in a limited number of areas around the state.

Elon Musk, Tesla’s chief executive officer, said in a late January call with investors that the company would launch driverless vehicles in Austin in June.

“This is not some far-off, mythical situation,” he said about the Texas launch. “It’s literally five, six months away.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.