driverless taxis disrupt competition

Tesla’s robotaxi service has won a major victory in Texas after state regulators granted the company a permit to operate driverless vehicles across the entire state. The Texas Department of Licensing and Regulation issued the permit to Tesla Robotaxi LLC as a licensed Transportation Network Company. The authorization allows Tesla to deploy fully driverless cars without human safety drivers until August 6, 2026.

Tesla launched its robotaxi pilot program in Austin in late June 2025. The company’s using Model Y vehicles equipped with its latest Full Self-Driving software. At first, Tesla offered rides only to select influencers, industry analysts, and Tesla content creators through invitations. Early rides included a human safety operator sitting in the front passenger seat. The service area has expanded twice in Austin over the past several weeks.

The permit comes under Texas law SB2807, which created new rules for autonomous vehicle ride-hailing services. While the permit lets Tesla operate commercially, the company still needs separate approval from the Texas Department of Motor Vehicles to officially classify its robotaxis as autonomous vehicles. Right now, Tesla’s vehicles are considered partially automated driving systems.

Tesla’s entering a crowded market. Uber, Lyft, and Waymo already operate in Texas. Waymo’s been running autonomous services in Austin through a partnership with Uber. Unlike its competitors, Tesla’s robotaxi service runs through its own app instead of third-party platforms. Users need a Tesla account and an invitation to access the service.

CEO Elon Musk confirmed the robotaxi service will open to the general public next month. He’s aiming to serve half of the U.S. population by the end of 2025. The statewide Texas permit allows Tesla to expand beyond its Austin pilot program faster than expected.

The news puts traditional ride-hailing drivers on notice. As Tesla and other companies roll out driverless services, human drivers face growing competition from robots that don’t need breaks, benefits, or wages. The Tesla Robotaxi app currently works by invitation only, but that’s about to change as the company prepares for its public launch.