Tesla has a plan to launch a next-gen taxi service — and it's nothing like what you're used to
Aside from a well-functioning vehicle, the most important part of a good taxi ride is a safe driver with excellent navigation skills. While that may be true of your average yellow cab experience, Tesla wants to redefine traditional taxis with its newly proposed rideshare service.
The first major change? Kicking out the driver.
According to the Washington Post, Tesla plans to launch a taxi service in California using autonomous self-driving electric vehicles.
Late last year, Tesla reportedly submitted a charter permit application to the California Public Utilities Commission seeking approval to transport passengers in its vehicles. In November, a CPUC official emailed Tesla to propose discussing the next steps of the company's robotaxi proposal, per an email obtained by the Post.
A spokesperson for the CPUC told the outlet that Tesla's permit is currently under consideration.
The Post reported that Tesla already has approval to test its driverless vehicles in California — if a human is behind the wheel. This new permit, however, would allow Tesla to accept self-driven ride requests from users.
Tesla, which is trying to turn around slumping sales and stock performance, is already in the process of rolling out a self-driving rideshare service in Austin, Texas.
While electric yellow cabs already exist in metropolitan areas like New York City, they are still rare across the United States. Even in New York, 19% of rides were from an EV or wheelchair-accessible vehicle, with the city combining the stats, though the Big Apple plans to make that 100% by 2030.
Tesla's entire vehicle fleet is electric, making the promise of an all-EV taxi service exciting to environmental advocates.
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Unlike gas-powered vehicles, which run on dirty fuel, EVs produce no planet-warming air pollution when driven — there is still pollution from manufacturing and charging the vehicles, of course, but there are two key ways EVs end up polluting much less.
First, the percentage of renewable, zero-fuel energy in the country is always ticking up, whereas fully gas-powered cars are fully reliant on burning fuel, which releases pollution into the air.
Second, gas cars lose around 80% of their energy to factors such as heat loss. Meanwhile, EVs' efficiency rate is about 89%, as they lose far less to heat waste and recapture a lot of other lost energy through regenerative braking fed back into the battery.
For these reasons, the Environmental Protection Agency reported that wider adoption of EVs could improve public health by curbing respiratory irritation, illnesses, and cancers linked to air pollution.
Tesla CEO Elon Musk has repeatedly expressed plans to deploy self-driving vehicles nationwide. In late 2024, Musk said he expects existing Tesla models to start offering "fully autonomous" driving in California and Texas this year. The company also announced plans for the upcoming Tesla Cybercab, also referred to as Robotaxi, a fully autonomous passenger vehicle without a steering wheel or gas pedals.
As the Post pointed out in its report, however, Tesla's autonomous technology has a questionable safety record marred by investigations and recalls.
Musk has recently made headlines for his work with the Trump administration and his position in the newly formed Department of Government Efficiency. As the Post reported, safety advocates are concerned the Tesla CEO's government role could create a worrisome conflict of interest that could compromise essential safety standards and federal guidelines related to self-driving vehicles.
Before his DOGE appointment, Musk said he would use his influence with the Trump administration to "create a federal framework for autonomous vehicles." There is a need for that, too, with Tesla not being the only business pursuing this — for example, Waymo has already been operating self-driving cabs in San Francisco since June.
Those safety advocates say that regardless of intent, a conflict of interest would remain if the oversight is not fully independent and supplied with sufficient resources to investigate risks.
The Post reported that a small government team regulating autonomous cars was recently "cut nearly in half" by DOGE cuts. The outlet added that the "reduction in workforce" cuts impacted the National Highway Traffic Safety Administration, the same government body responsible for investigating and reviewing Tesla's safety standards.
If it can be done safely or without requiring the driverless part of the plan until the tech is perfected, the electrification of taxis could make a major difference in air pollution.
Transportation — from passenger cars to rideshares to long-haul trucks — is the largest combined source of planet-warming pollution in the U.S. There are more than 600,000 ride-hail vehicles in California, where rideshare services like Uber and Lyft are more popular than yellow cab services. These largely gas-powered cars release about 50% more planet-warming pollution than the average passenger car due to driving frequency, making them particularly good candidates for upgrading to electric.
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