Tesla (TSLA) has entered the ride-hailing market in the San Francisco Bay Area, marking a major step in its expansion efforts. However, despite CEO Elon Musk’s promises about fully autonomous robotaxis, the new service still relies on human drivers. TSLA stock was down about 3% on Thursday.
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Tesla’s Invite-Only Ride-Hailing Service
Tesla’s ride-hailing pilot uses its existing fleet of EVs, including the Model 3 and Model Y, to offer on-demand rides across San Francisco. The service is integrated into the Tesla app, allowing users to book rides directly, similar to Uber (UBER) and Lyft (LYFT).
Currently, the service is available on an invite-only basis and has been given to long-time Tesla owners, influencers, and early Full Self-Driving (FSD) beta testers. Also, some users received invites via updates to the Tesla app.
Before the Bay Area rollout, Tesla started its first ride-hailing test in Austin, Texas, in June 2025. A key difference in the two launches is that in San Francisco, a safety driver sits behind the wheel, unlike in Austin, where a human sat in the passenger seat.
Regulatory Approval a Key Hurdle
California’s regulations are stricter for autonomous taxi services than Texas, where Tesla started its robotaxi service in June.
The California Department of Motor Vehicles (DMV) confirmed last week that Tesla has not yet applied for a permit to run fully driverless taxis in the state. However, Tesla holds a transportation charter permit, which permits the company to offer rides with a driver behind the wheel.
TSLA’s Robotaxi Ambitions
Market experts like Cathie Wood and Daniel Ives see a massive opportunity in the robotaxi market. Last month, Ives estimated the market could add $1 trillion or more to Tesla’s market cap over time. Moreover, last year, Wood said TSLA’s robotaxi business could drive its valuation, potentially accounting for around 90% of its enterprise value and earnings by 2029.
However, Tesla’s robotaxi efforts have faced skepticism. Some critics argue the service is mostly hype, pointing to years of missed deadlines and the need for human drivers.
Overall, Tesla’s robotaxi launch has begun, but it’s not the fully driverless Musk once promised. While early tests look promising, challenges remain. Further, investors and regulators are watching closely to see if Tesla can turn the hype into reality.
Is TSLA Stock a Buy?
Turning to Wall Street, TSLA stock has a Hold consensus rating based on 14 Buys, 14 Holds, and eight Sells assigned in the last three months. At $310.84, the average Tesla price target implies a 0.46% downside potential. The stock has declined 16.85% over the past six months.
