Elon Musk's Tesla Robotaxi service hits real roads—$4.20 rides begin in Austin with no drivers; but here's a catch
Tesla officially launched its long-anticipated driverless Robotaxi rides in Austin, Texas, on Sunday. This rollout is the company's first real-world trial of autonomous cars transporting paying passengers without anyone behind the wheel. The test is currently limited to a small section of the South Congress neighborhood. Each vehicle, a 2025 Model Y, is equipped with Tesla's updated Full Self-Driving (FSD) software and monitored by a Tesla employee seated in the front passenger seat.
CEO Elon Musk posted that the launch was the result of 'a decade of hard work,' giving credit to Tesla's in-house software and AI chip teams. Though Tesla's Cybercabs unveiled in 2024 were not used, the Model Ys now feature a version of Tesla's so-called 'unsupervised' driving technology.
Only a handful of cars, limited operations
Currently, only ten vehicles are part of the trial, with operations restricted to daylight hours between 6 a.m. and midnight and paused during poor weather. The rides are priced at a flat $4.20—a likely nod to Musk's frequent internet references. Social media influencers were among the first to access the service through early invitations.
Footage shared online shows the cars operating normally, though some videos capture abrupt braking, especially around law enforcement. Tesla has not clarified the extent of safety monitors' ability to intervene during rides. The company has also said in-ride monitoring is off by default unless an incident is reported.
Regulations, safety, and secrecy surround the launch
Ahead of the launch, Texas passed a new law governing autonomous vehicles. Effective September 1, the law requires AV operators to obtain state permits and meet Level 4 autonomy standards. The law replaces a previous policy that prevented local authorities from regulating such vehicles. Now, the Texas DMV can revoke permits if safety concerns arise. Governor Greg Abbott signed the legislation just before Tesla's Robotaxi rollout began.
Unlike competitors like Waymo and Zoox, Tesla uses only cameras and neural networks—without lidar or radar—to power its system. While this approach may lower costs, some experts argue it introduces more risk. Carnegie Mellon's Philip Koopman described the launch as 'the end of the beginning,' highlighting that scaling such services citywide remains a challenge.
Tesla has not disclosed many technical or operational details. In a letter to the Texas Attorney General, it declined to share specifics, citing trade secrets and confidential business data. As a result, most public knowledge has come from Musk's social media and promotional content by influencers.Tesla's service currently excludes riders under 18 and avoids difficult intersections or complex conditions. The company may suspend passengers who violate rules, such as smoking, drinking, or sharing ride footage that breaks guidelines. Cameras will scan the cabin after rides to ensure vehicles are ready for the next trip.Tesla's driverless ride service has finally hit real roads. But with tight controls, limited access, and lingering questions, the big test lies ahead.
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FSD adoption: Will more owners pay for Full Self-Driving if it proves reliable in Austin? FAQs: (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Tesla stock surged on Monday after the company officially launched its first fleet of robotaxis in Austin, Texas. Shares of TSLA jumped nearly, closing in on, following the rollout of autonomous Model Y vehicles operating within a controlled zone. This move marks a major step toward Tesla's long-term vision of building a driverless ride-hailing to aroundduring mid-day trading, up from a previous close of, according to Yahoo Finance. That jump added billions to Tesla's market cap in just a few hours, as investors rushed to price in the massive long-term potential of autonomous boost in Tesla stock price came as aboutbegan offering rides at a flat rate ofacross central Austin. The rides are fully autonomous and part of a limited test. Passengers can hail these robotaxis using the Tesla app, with no safety drivers onboard. While the routes are currently geofenced, Elon Musk plans to expand to other cities like Los Angeles and San Francisco in the coming analyst Dan Ives, who took one of the first rides, called it a 'historic moment,' backing a bullish $500 price target. In contrast, UBS analyst Joseph Spak remained cautious, raising his target from $160 to $215, but kept a Sell rating, saying much of the hype is already priced stock responded fast and furious. By mid-day,, trading at, up fromat Friday's close. Volume also spiked, with overchanging excitement came not just from the novelty of the robotaxi launch, but from the broader implications for Tesla's business model. Tesla is aiming to shift from selling cars to offering mobility services, a market that analysts say could be worth hundreds of billions of dollars by Ives, a well-known Tesla bull and analyst at Wedbush, even took a ride himself. 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