Tesla’s Robotaxis Are (Sort Of) Hitting the Streets of San Francisco This Weekend

Tesla’s self-driving dreams take a baby step forward — but they still need a babysitter.

Tesla is gearing up to launch its much-hyped Robotaxi service in the Bay Area this weekend, according to an internal memo seen by Business Insider. The rollout, which includes an invite-only launch for select Tesla owners, is set to begin as early as Friday, covering a wide swath of the Bay — from Marin and the East Bay to San Jose.

But there’s a catch: these robotaxis aren’t exactly driverless. At least not yet.

Each vehicle will have a safety driver in the front seat who can take over at any time, with full access to the brake and steering wheel. So technically, this is more “autonomous lite” than full robo-revolution. Still, passengers will pay for their rides, making it Tesla’s first real commercial attempt at a self-driving taxi experience.

One problem: Tesla doesn’t have the permit required in California to operate a true driverless ride-hailing service. The California DMV confirmed that the company hasn’t applied for the necessary approvals to run a commercial autonomous service without a driver in control.

But because the robotaxis will still have a human in the seat, Tesla might be exploiting a legal gray area — essentially running a glorified demo under its existing testing permit.

The Robotaxi fleet is based on modified Model Ys, built at Tesla’s Austin factory. They include extra cameras and telecom gear, tailored for self-driving operations. This follows a limited pilot in Austin, Texas, where Tesla launched its first batch of Robotaxis last month. The cars there have logged around 7,000 miles total, which breaks down to under 20 miles a day per vehicle — not exactly taking over the roads.

Also worth noting: the service in Austin is invite-only, monitored closely, and still in training wheels mode. Reports of strange drop-offs and even a fender bender have surfaced — not great for public trust.

During Tesla’s Q2 earnings call this week, Elon Musk confirmed the Bay Area launch was imminent. He admitted that safety operators would be in the front seat “for now,” but he’s still bullish on going fully autonomous — someday. He also claimed Tesla aims to expand to half the US population by year-end, though with a supervised system, that’s more marketing than milestone.

Tesla’s Robotaxi rollout comes at a time when its core car sales are slumping, and the company is leaning hard into AI, self-driving, and robotics to drive its next wave of growth. But behind the bold vision, regulators remain cautious — and Tesla still hasn’t cleared the many legal hurdles for full autonomy in California.

Tesla’s Q2 earnings showed its sharpest revenue drop in a decade, and shares took a hit. Critics say the company is overhyping safety stats and underdelivering on real-world results. Meanwhile, competitors like Mobileye and Holon are working with Lyft on upcoming autonomous shuttle services that may actually beat Tesla to public-ready rollouts.

With input from Business Insider, Forbes, and Reuters.