Instead of an Uber or Lyft, have you opted for a driverless rideshare vehicle like Waymo? These services are available in just a few select cities like LA and Phoenix currently, but more are planned and competition is heating up. After a decade of promises to bring its version to the public, Tesla unveiled the Robotaxi this weekend. But it is a very small launch, just a dozen vehicles operating in a limited geofenced area of Austin, TX and available only to invited Tesla enthusiasts so far. These early rides are available for just $4.20 and safety monitoring personnel will ride along in the front passenger seat for the time being.
Waymo is the market leader in this industry, recently reaching over 10 million paid rides with an impressive safety record compared to human drivers, but it is still not profitable. How will the Tesla version compare? It features an advanced version of FSD, or Full Self-Driving, employed on its Model Y vehicle for this version of the Robotaxi. While Alphabet’s Waymo and Amazon’s Zoox use a combination of cameras, radar and lidar (detection using lasers), Tesla uses cameras only in a less expensive implementation. All three also use remote monitoring of vehicles.
Tesla has had a challenging year with its primary business of electric vehicle manufacturing facing declining sales, in part because of controversial activities of its CEO Elon Musk but also growing competition. Analysts believe that autonomous driving can be a bright spot for the future, and Musk has been claiming that within two years there will be a million Robotaxis on US roads. How? A software enhancement could enable private Model Y owners to transform their cars into vehicles-for-hire while they are at work or on vacation.
How likely is this level of growth? Would you rent out your Model Y if you had one?
Activities:
- Ask students: Have you been in a driverless vehicle? Would you ride in one in Austin right now?
- Have students look up a couple of reviews for Tesla Robotaxi online. An article on The Verge has some interesting responses: https://www.theverge.com/news/690846/tesla-robotaxi-first-reaction-austin. How would you rate the launch? What changes might have improved it?
- Ask students to form small groups and create a SWOT analysis for the Tesla Robotaxi. Some research will be necessary. Do you predict success for this venture?
Sources: Peterson, Becky, (22 Jun 2025) Tesla’s Robotaxis Are Here: What You Need to Know, Wall Street Journal. Condon, Bernard, (22 Jun 2025) Would you hail a ‘robotaxi’? Musk bets cabs will give Tesla a lift after boycotts and sales plunge, APnews.com.
