
First Tesla Robotaxi Rides In California May Risk DMV Shutdown
The problem is, this sort of more fully automated ride may run afoul of more subtle complexities in California self-driving vehicle regulations which led to the DMV shutting down testing by Uber's self-driving research unit ATG several years ago. Tesla is using a carve-out in the California laws which state that they do not cover 'driver assist' tools, sometimes referred to as 'Level 2' in specifications from NHTSA and the Society of Automotive Engineers.
The California regulations require a large set of permits from both the DMV and the public utilities commission to operate a taxi service based on self-driving vehicles. Seven different permits are needed, and Tesla has only 2 and has not applied for the others. By declaring to the DMV that this is not a self-driving car, but rather a driver assist car that requires a human driver behind the wheel and in control, they hope to bypass the need for those permits.
The line, however, between Tesla FSD, which is indeed correctly sold as a driver-assist system and this 'robotaxi' version is challenging. Just when does a system switch from being driver-assist to prototype self-driving? For now, the DMV is accepting that and stated:
The Regulations and Driver Assist
In 2011-12, I participated in the drafting of the first drafting of the nation's first laws regulating self-driving in Nevada and California. The first laws only enabled testing, and were prompted by Google, the only company trying to do tests. Representatives from big automakers quickly joined the discussions, and they were concerned that these regulations might interfere with some of the systems they sold, such as adaptive cruise controls, and lanekeeping systems, which are known as 'driver assist' tools because a human driver is responsible for the vehicle, and the system only assists. They got the carve-out they wanted.
In 2016, Uber was developing self-driving at its ill-fated 'ATG' division. The head of the division, Anthony Levandowski, who had represented Google in the drafting of these laws, began testing their vehicles on California roads. He declared that because the vehicles had a human safety driver on board, they were driver assist, and Uber didn't need a self-driving testing permit.
The DMV would have none of it, and threatened Uber with pulling its vehicles from the roads, cancelling their licence plates. Uber complied and got the testing permits. Later, Uber ATG would have a fatal crash. It shut down operations and the team was purchased by Aurora. (Aurora just announced this week that they have begun 'driverless' trucking at night in Texas, though also with an employee behind the wheel.)
The DMV has not had enough time to look at the new service that Tesla has deployed. The Tesla robotaxi stack definitely tries to perform the complete robotaxi task, including pick-up and drop-off. It is not ready from a safety standpoint. Other data suggests the Tesla FSD system needs human intervention around every 400 miles, Tesla has said they now have reached near 10,000 miles, but their operations in Austin suggest otherwise. Either way, to make a working robotaxi requires needing a serious intervention every million miles or so to meet Musk's stated goal of 'much safer than a human' and so Tesla still has very far to go and the safety driver is needed.
At the same time, Uber ATG was very, very, very far behind this quality level. At the time of their fatality they needed safety driver takeover about every 15 miles. Because their safety driver disregarded her job and watched a video instead of the road, the vehicle struck and killed a pedestrian. Uber ATG never took passengers, so their vehicle also was not capable of doing the things like summoning, pick-up and drop-off that the Tesla vehicle does.
It seems very unlikely that an analysis of the Tesla Robotaxi system in comparison to the Uber ATG system would class the Tesla system as less of a prototype self-driving system. Except for one strange irony.
DMV Lawsuit Over FSD Name
The DMV is currently in court suing to remove Tesla from the roads in general for deceptive labeling, but in the opposite direction. Tesla calls its consumer product 'Full Self Driving (Supervised)' and formerly called it 'Beta.' The DMV has been declaring that Tesla's system is not self-driving (and indeed it isn't) and that they should not be using a name that suggests it is.
Tesla robotaxi isn't self-driving either, but like Uber ATG's system, it definitely is intended to be. Uber ATG was made to get the permits because they were trying to build a robotaxi, even though it wasn't ready yet. Tesla is very explicitly calling their system a robotaxi, though it also isn't ready yet. The DMV will have to make a decision and possibly alter its policies.
Product Quality
At present the service seems very limited. The influencer who got the early ride above got the same car every time he asked for a ride, and appeared to be followed by a Cybertruck chase car, so it was carefully monitored. However, there's no reason Tesla can't put this into operation with a safety driver. Indeed, it's no surprise that Tesla could immediately allow a larger service area than Waymo does for their actual self-driving robotaxi service. Tesla FSD with a supervisor is reasonably safe over most roads in the USA. Other than logistic costs they could offer a service anywhere, though of course it costs as much as a limo service to operate and so is not commercially interesting.
You can, and other companies have, offered test robotaxi services with safety drivers even though the robotaxi software still needs 100x or 1,000x improvement in quality in order to work. While Perhaps it only needs a 2x improvement and is thus 'almost ready' it is not easy for outsiders to judge this quality, you need statistics over large nubmers of miles, which Tesla does not release.
The robotaxi system, which has been seen in Austin, has added impressive capabilities above the point to point driving abilities that Tesla FSD has shown for some time. Most notably it is doing pick-up and drop-off on aribitrary curbsides, which took many teams some effort to develop, though again, they made it work without a safety driver, which is vastly harder. In pondering why Tesla has released this service, this may be the main reason--it already has been doing lots of testing of the FSD driving system, including in the Bay Area (the rider's route included Tesla HQ after all.) It is the PuDo (Pick-up/Drop-off) which is new and needs testing.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Forbes
12 minutes ago
- Forbes
AI Boom Fuels San Francisco Party Scene As People Seek Connection
Secret salons, oyster happy hours, coffee raves--San Francisco is back and basking in idyllic weather as rent increases jump to the highest in the nation. Streets are teeming with people racing to events, despite tech season being weeks away, when conferences like Dreamforce, Disrupt, TedAI and SF Tech Week take over the city. Much of the frenzy is being attributed to the AI gold rush with people returning to town to get a piece of the action, so over the past week I popped into several happenings to hear what everyone is talking about. Finding your tribe At AGI House, a sprawling Hillsborough mansion just outside of San Francisco, known for hosting tech celebrities like Google cofounder Sergey Brin and Grimes, dozens gathered for a garden gala featuring talks with industry luminaries OpenAI's chief strategy officer Jason Kwon and former OpenAI interim CEO Emmett Shear. It was as insider as it gets with a pulsing DJ set by Twitch cofounder Justin Kan, meticulously curated by AGI House founder Rocky Yu and Icons podcaster Melanie Uno. In the mix was Poshmark cofounder Manish Chandra who shared with me his views on the AI transformation. I asked, what will people do with their lives as AI frees up time, and more importantly how will they pay for it. He replied, 'I feel like we're moving to more and more abundance, even though the path to abundance always feels a little uncertain and dark." "When the dot com boom was crashing, it was impossible to find a job. Highway 101 was emptier than Covid. There were see-through buildings, literally no jobs, and people were throwing in the towel.' Trying times, he recalled. "I remember it from a personal perspective, because I had young kids and had to figure out how to survive.' He expressed how hard times bring out things that can transform you, whether you discover superpowers or connect with new people. 'Human connections deepen when times are tough,' he said. 'When times are good, people just kind of ignore each other.' He also said there have been far crazier boom and bust cycles that have come before, with companies giving away BMWs and other outrageous perks to attract engineers. 'In the nineties, technology was changing so fast, it felt like everything you were doing was going to become obsolete, literally every day," he said. 'Every 10 years, we predict the demise of Silicon Valley, and we feel like whatever the technology is coming is dooming humanity, and is more severe than last time. Yet here we all are thriving, sitting here this lovely evening.' Emmett Shear, now cofounder of Andreessen-backed AI alignment lab, Softmax, sat down with me to discuss how people can best keep their head straight during these times. He explained that in the seventies there was a seminal work authored by Alvin Toffler, called Future Shock, that explored the psychological disorientation that can occur as a result of rapid technological change. 'This feeling of overwhelm, that if things keep changing, I can't learn fast enough to keep up with the system," he said. "But the way you keep up is actually by giving up on trying to understand everything at that level of detail.' He then shared his barbell strategy for surviving the next five years. 'In a high variance environment where things can change a lot in unexpected ways, you should just YOLO big things that might work, because even if you fail, your tried-and-true plan could also fail. So there's no point playing it safe, might as well be ambitious,' he advised. 'On the other hand, as things get riskier, you'll need to build up safety and reliability support to counterbalance.' He said hunter-gatherers lived in the same situation we're wandering into, a world of forces more powerful than themselves and beyond their control. Not only was it spiritually, emotionally and intellectually beneficial to be in a tight community, but also economically sound. When you store meat from the hunt in the bellies of friends, they'll be around to help when you find yourself in a tough spot. Futureproofing AI bets Back in San Francisco, at a Michelin starred restaurant where the meal was served community style making dining optional, AI unicorn Honeybook gathered the press to discuss how AI is birthing a new breed of one person startups and solopreneurs. It was here I had a chance to talk with Jeff Crowe, managing partner of Norwest Venture Partners, who told me the story of a 20-year old founder that landed seed funding to create text-to-sheets, text-to-deck apps right before ChatGPT made it a feature. This led to the question, how can VCs futureproof bets to prevent obsolescense in the age of AI. He said the first thing to look at is product. If it's a thin wrapper around a core, it's hard to futureproof as the LLMs eat their way further into the application layer. 'It's how venture capital looked at personal software in the nineties and said what's the differentiation if Microsoft moves into the space. Thirty-plus years later, it's a similar phenomenon in AI products, where OpenAI, Anthropic and others keep adding functionality." As far as defensible moats, he looks for product capabilities not easily disruptable like those with domain-specific data, integration with large enterprise systems, and bespoke distribution tied to supply chain. If it's a product that's been around longer, he looks for how fast it's pivoting to AI, driving into core functionality as well as operations including development, customer support, sales, marketing, HR and finance. Because if operations aren't futureproofed, competitors can gain a superior cost structure and become more capital efficient and profitable. He looks to see whether customers are adapting because some are going to get accelerated, and others obliterated, with risks that have nothing to do with the core business. Lastly, he looks for a culture that's nimble and can move exceptionally quickly. A fan of young talent, Crowe believes hiring AI-natives is the best way to transform an organization, because their rate of change is less than a worker whose baseline is pre-AI. Embracing AI workers Across town, Initialized Capital was hosting its own press dinner, introducing their portfolio of agentic startups deploying digital workers. Runway cofounder Siqi Chen told me from the moment he launched his startup in 2020, he knew they'd never have more than 100 people, because they had early access to GPT-3 and knew they could scale faster with AI, than headcount. In contrast to Crowe's hiring strategy, Chen said, Runway is hiring only senior talent. 'The profile of how we hire is quite different today than it was even three or four years ago. It's staff or principal level only at this point, because junior stuff can basically be done by LLMs today." 'We're seeing non-technical people contribute on a technical level like never before-- tagging a robot to write the code for a bug--that's just magic," he said. Runway uses bots for everything, from qualifying leads to reviewing documents. One of Initialized other portco commented that they deployed AI in Slack for IT support under the name of Paul, not AI Paul. A bit head-spinning to think you can be chatting with an AI colleague and not know it, even if they are funny. Initialized Capital's managing partner Brett Gibson said it's the natural progression of where we're heading. I asked him whether this was the end of the app economy. He replied, 'Software is going to trend towards being generatable. There are going to be a lot of apps you still want a relationship with for a variety of reasons, because they have other people on them and you're collaborating, or perhaps the AI itself has a personality you want to interact with. It's not going away, it's just going to have to adapt.' And what about humans, I asked, what's next for humans? 'The one thing that makes me very hopeful is that if there's anything AI is very good at, it's personalized education. And so hopefully, that will be the path for those feeling left out. People should follow whatever they're interested in and curious about because a high agency person using high leverage tools are going to do something cool and that's valuable," he said. AI gets the last word Back at AGI House, hanging out with hashtag inventor Chris Messina, I asked what advice he would give Gen Alpha on where to focus their energies, considering how pandemic losers have become AI winners, with ballet dancers, hair stylists and bartenders the few trades AI can't replace. 'VCs are over, SAS is over, everything that's been going on for the last 10 or 15 years kind of doesn't really make sense anymore,' he replied. 'If you really want to invest in the future, it's about having a perspective, being able to bring people into that and creating movements.' Echoing what Chen said: "There's only one Mr. Beast--and so if you develop relationship as a brand, that becomes sustainable value because AI cannot replace brand. Or can it? ChatGPT, may have no defensible moat as an AI assistant, but as a cultural icon with an estimated 1 billion followers, it remains pretty much untouchable. Just like the city from which it came.
Yahoo
19 minutes ago
- Yahoo
Earnings Preview: What to Expect From Williams-Sonoma's Report
Valued at $23.4 billion by market cap, San Francisco-based Williams-Sonoma, Inc. (WSM) operates as a multi-channel specialty retailer of premium quality home products. The company offers various cooking, dining, home decor, and related products through its brands like Pottery Barn, West Elm, Rejuvenation, etc. The company is expected to announce its fiscal Q2 earnings on Thursday, Aug. 28. Ahead of this event, analysts project the company to report a profit of $1.78 per share, up 2.3% from $1.74 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in each of the last four quarters, which is impressive. More News from Barchart With UnitedHealth Under DOJ Investigation, Should You Buy, Sell, or Hold UNH Stock Now? Trump Won't Take Away Tesla's Subsidies. Does That Make TSLA Stock a Safe Buy Here? Can AMD Stock Hit $210 in 2025? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. For the current year, analysts expect WSM to report EPS of $8.53, down 3% from $8.79 in fiscal 2024. Nonetheless, its EPS is expected to rebound in fiscal 2026, rising 5.5% year over year to $9. Shares of WSM have climbed 25.4% over the past 52 weeks, outperforming both the S&P 500 Index's ($SPX) 16.6% uptick and the Consumer Discretionary Select Sector SPDR Fund's (XLY) 19.9% gain over the same time frame. WSM stock dropped 4.5% following the release of its Q1 results on May 22. The company's net revenues for the quarter increased 4.2% year-over-year to $1.7 billion, mainly driven by a slight improvement in comparable store sales. Moreover, its adjusted EPS came in at $1.85 and surpassed the consensus estimates by 5.1%. Wall Street analysts are moderately optimistic about WSM's stock, with a 'Moderate Buy" rating overall. Among 18 analysts covering the stock, five recommend "Strong Buy," one suggests 'Moderate Buy,' and 12 indicate 'Hold.' The stock currently trades above its mean price target of $184.29. On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
34 minutes ago
- Yahoo
Tesla (TSLA) Climbed in Q2 Despite Challenges
Baron Funds, an investment management company, released its 'Baron Focused Growth Fund' second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund maintained its strong relative performance from the first quarter into the second quarter, with overall performance improving as it completely recovered from the losses experienced earlier, which were related to economic concerns stemming from newly implemented tariffs by the administration. Most of the firm's company management teams expect the tariffs to have a minimal impact, as costs will likely be shared with suppliers and passed through in small price increases that won't significantly affect demand. As a result of this clarity, the fund appreciated by 12.78% (Institutional Shares) compared to an 11.31% gain for the Russell 2500 Growth Index. In addition, please check the fund's top five holdings to know its best picks in 2025. In its second-quarter 2025 investor letter, Baron Focused Growth Fund highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was -2.25%, and its shares gained 48.44% of their value over the last 52 weeks. On July 31, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $308.27 per share, with a market capitalization of $994.309 billion. Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter: "Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company's core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla's near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story." Tesla, Inc. (NASDAQ:TSLA) is in 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter, which was 126 in the previous quarter. While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Tesla, Inc. (NASDAQ:TSLA) and shared the list of must-watch AI stocks on Wall Street. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data