Tesla Rolls Out First Robotaxis, Select Riders Paying Flat $4.20 Fee Per ride

Tesla’s first robotaxis took to the streets of Austin, Texas on Sunday, the start-up ride-sharing service picking up invite-only riders for a flat $4.20 a trip. The move was hailed by Tesla bulls who see the move as the first step in what could become an even bigger business than the company’s EV operations. But it’s yet to be seen if Tesla can stand up against competitors like Waymo and Uber — or whether the backlash facing Tesla EVs will cripple the robotaxi service, as well. More from Headlight.News.

A handful of specially modified Tesla Model Y EVs rolled out of the automaker’s factory in Austin, Texas on Sunday, marking the first in what CEO Elon Musk has promised will eventually be millions of robotaxis plying U.S. roadways.

The initial 10 vehicles actually took to the streets of the Texas capital with human backup operators ready to take control in an emergency. Earlier in June, Musk had said he “super paranoid about safety,” while critics questioned whether the autonomous vehicles could live up to the executive’s promises. Federal regulators have launched a series of probes looking at crashes involving the Autopilot and Full Self-Driving technologies used in Tesla’s retail EVs.

But the long-delayed robotaxi roll-out appeared to buoy the automaker’s stock in recent weeks. Several key investors, have bullishly forecast the technology could more than double Tesla’s current market capitalization.

Behind the headlines

Even before he returned to Washington after a controversial four months working for the Trump administration, Musk began emphasizing several new lines of business that, he claimed, could more than make up for Tesla’s declining EV sales. These included artificial intelligence, humanoid robots and robotaxis.

Tesla revealed the specially designed CyberCab during an event at the Warner Bros. studios in Burbank, California last October. Designed solely to operate without a driver, the prototype is still well away from production, however, and Tesla decided to begin robotaxi service using modified versions of the Model Y SUV. A squadron of 10 were initially put into service over the weekend.

For the moment, they’re available only to a select group of riders who are paying a flat rate of $4.20 per trip. And while Tesla ultimately claims they will be able to operate in fully driverless mode, there will be a backup “operator” stationed behind the wheel, for the indefinite future, ready to take over in an emergency.

Why this could be big news

Proponents of the technology believe robotaxis will take things far beyond what ride-sharing services such as Uber and Lyft can accomplish since this eliminates the most expensive part of the business: the driver.

If Tesla continues to offer such low-cost rides it would greatly undercut those competitors. Meanwhile, the automaker’s plan calls for selling its robotaxis to retail customers who would be able to then put the vehicles into service when they didn’t personally didn’t need them. Revenues would be split between owners and Tesla which would manage operations through smartphone apps.

This has given wings to Tesla stock – which has ridden a rollercoaster since Musk signed on for his controversial stint with the Trump administration. That has resulted in protests at Tesla stores around the world, and boycotts of the automaker’s products.

But investors are betting that the ride-sharing service will more than offset such setbacks. Dan Ives, the auto analyst with Wedbush Securities – and a long-time Tesla bull – has forecast the company’s market capitalization could hit $2 trillion this year, roughly triple its low back in April.

More Tesla News

• Tesla v Waymo: Get Set for the Battle of the Robotaxis
• Musk Sets Date for Robotaxi Debut
• The “Musk Effect”

Plenty of competition

According to Ives, the “golden era of autonomous” kicked off with the roll-out of the first Tesla robotaxis on Sunday. But it’s far from the only company seeing significant opportunities in the driverless ride-share market. Google spin-off Waymo already operates 1,500 driverless vehicles in San Francisco, Los Angeles, Phoenix and Austin – and it plans to grow that to 3,500 as it enters markets in Atlanta, Miamai and Washington, D.C.

General Motors abandoned its Cruise robocab venture after a crash in San Francisco in October 2023. But Uber is getting ready to reenter the emerging market after putting its robotaxi aspirations on hold due to a fatal crash.

Meanwhile, Amazon is launching its own driverless ride-sharing service. It has a small prototype fleet of around 20 vehicles in various cities, with commercial operations set to debut this year in Las Vegas, with plans then to expand to San Francisco.

Catching up

While Tesla might be starting small, Musk plans to accelerate its roll-out, claiming it will reach a total of 25 U.S. cities over the next year. Skeptics, however, noted that Tesla has a history of missing deadlines. The June 23 rollout was just the latest in a series of target dates Musk had set – and previously missed.

The most immediate test will come as the modified Model Y robotaxis start fanning out across Austin. Safety advocates and regulators will be watching closely to see if those vehicles can operate without trouble – not only avoiding crashes but by not forcing the human backup operators to intervene in an emergency.

The next test will focus on the specially designed CyberCab. Tesla has only rarely hit its target for bringing new vehicles to market. The Cybertruck pickup was several years late.

There’s also the question of whether potential riders will be willing to use the service, several analysts have cautioned. The company could face boycotts and protests similar to what’s been seen at Tesla dealerships. Sales of the automaker’s EVs is expected to be down sharply for the second quarter, based on preliminary registration data, reported Cox Automotive.