Tesla can now offer ride-hailing service in California
What's the story
Tesla has been granted a transportation charter-party carrier permit by the California Public Utilities Commission (CPUC).
The permit enables the electric vehicle maker to ferry passengers in its vehicles, taking a major step toward launching ride-hailing services.
Tesla will first use this permit to offer transportation services for its employees in the state using company-owned cars.
Market competition
Ride-hailing service to rival major players
Tesla's entry into the ride-hailing space is expected to take on giants like Uber, Lyft, and Waymo.
Elon Musk had previously said that Tesla plans to launch driverless ride-hailing services in Austin this June and hopes to launch in California by year-end.
However, the new permit doesn't include autonomous vehicle rides or testing or deployment of autonomous vehicles.
Future plans
TCP permit: A step toward robotaxi service
The permit given to Tesla, called a transportation charter permit (TCP), is different from those of ride-hailing companies such as Uber and Lyft.
A TCP implies the company owns the vehicles and employs drivers.
This approval marks a first step toward launching a robotaxi service in California, where Waymo runs a driverless fleet in San Francisco.
Business strategy
Tesla's current operations and future plans
Currently, Tesla is providing Bay Area employees with transportation services via a Tesla-developed app with a safety driver.
The company has not commented on this development yet. However, it is evident that Musk's vision for autonomous driving, robotics, and artificial intelligence goes beyond electric vehicle sales.
Despite challenges like an aging lineup and criticism of Musk's political affiliations, Tesla continues to chase these ambitious projects.
Permit requirements
Tesla does not seek participation in autonomous vehicle program
Tesla's application for the TCP permit doesn't seek participation in CPUC's Autonomous Vehicle Passenger Service Programs, with or without a driver.
If Tesla chooses to apply for these permits in the future, it will also have to get permits from the California Department of Motor Vehicles (DMV), which regulates autonomous vehicle testing/deployment in the state.
Currently, Tesla does not have authority from DMV to offer any driverless rides for testing/deployment purposes.