• Tesla pilots paid robotaxi rides in Austin with driverless Model Ys.
• Uses only cameras, aiming to cut costs and scale faster than rivals.

Tesla has started a small trial of its self-driving taxi service in Austin, Texas. About 10 modified Model Ys were spotted on Sunday picking up paying riders – with no one behind the wheel. Social media clips showed influencers taking short rides, part of what appears to be a test run in one neighbourhood.

The effort marks Tesla’s first paid robotaxi rides. CEO Elon Musk has been talking about this for years and now says it’s ready to scale. He also hinted that a separate robotaxi vehicle is in the works. Musk shared several videos of the Austin rollout and described the moment as the “culmination of a decade of hard work.” He credited Tesla’s internal chip and software teams for building everything from scratch.

In one clip, influencer and Tesla investor Sawyer Merritt recorded his ride from a pickup point to a bar in town. The trip cost $4.20, a flat fee Musk confirmed on X.

Tesla hasn’t said how much oversight the cars still need, but passengers were seen sitting up front, acting as safety monitors. The rides are limited to a small area and avoid challenging conditions like bad weather and complex intersections. Riders must also be at least 18.

How Tesla stacks up against Waymo and Zoox

Tesla is entering a space already occupied by Waymo, which runs fully autonomous ride-hailing services in parts of San Francisco, Phoenix, and Los Angeles. It’s also testing in cities like Las Vegas, San Diego, and Washington DC. Waymo has been in the commercial market since 2018 and operates around 1,500 vehicles, with plans to expand by another 2,000 this year.

Zoox, owned by Amazon, hasn’t gone public with its robotaxi service yet but is preparing for launch.

All three companies are taking different approaches. Waymo and Zoox use lidar, radar, and high-resolution maps. Tesla relies on cameras alone. Musk argues that removing extra sensors will make Tesla’s system cheaper and easier to scale.

Sam Korus, Director of Research for Autonomous Tech at ARK Invest, said Tesla’s robotaxi model represents a shift in its business. Instead of selling cars, it’s aiming for recurring revenue more typical of software companies. Korus believes robotaxis could account for most of Tesla’s future value.

He said Tesla has a massive edge in data, with far more real-world driving input than its rivals. This could help the company train its AI systems faster and handle unusual driving situations more effectively. Without lidar and other expensive hardware, Korus estimates Tesla’s cost per mile could be 30 – 40% lower than Waymo’s.

Legal and regulatory backdrop in Texas

The launch comes as Texas updates its rules for autonomous vehicles. Governor Greg Abbott recently signed a bill that requires companies to apply for permits from the state’s Department of Motor Vehicles before operating self-driving cars on public roads.

The law goes into effect in September. It allows state officials to revoke permits if they believe a vehicle poses a safety risk. It also asks companies to share instructions with emergency responders on how to handle these vehicles in a crisis.

The new law marks a shift for Texas. Back in 2017, the state barred local governments from setting their own rules on autonomous vehicles. The updated framework now adds a layer of state-level oversight but still keeps the permit process relatively simple.

Bryant Walker Smith, a law professor who studies autonomous driving, described the system as “easy to get, easy to lose.” That’s a contrast to California, where permits are harder to obtain but come with more structure.

Big promises, bigger challenges

Even with the Austin launch, Tesla still faces major hurdles. Experts say rolling out a nationwide robotaxi network will take years. Philip Koopman, a professor at Carnegie Mellon University who focuses on self-driving systems, said this stage is just the “end of the beginning.”

Tesla is not alone in facing setbacks. GM’s Cruise unit, another major player in the field, was forced to halt operations after an incident raised safety concerns. Regulators are keeping a close watch on how companies move forward.

Musk has said Tesla will take a cautious approach in Austin and will only expand once it’s confident in the system’s safety. But the road ahead includes not just technical barriers but also trust, regulation, and public scrutiny.

For now, Tesla’s trial remains small, but it puts the company one step closer to testing whether its camera-only approach can keep up with – or surpass – the competition.