Featured Article

The Wild West of robotaxis: Will Texas be a regulatory haven or chaos unleashed?

Texas cities have one weapon


Image Credits: Bryce Durbin

All eyes might be on the California robotaxi market, but Texas is the one shaping up to be the next hot testbed of the technology — and regulatory fights that could follow.

The Lone Star State has been home to autonomous vehicle testing, particularly with trucks, for years now. However, Texas, a state with negligible AV regulation, is poised to draw a greater share of industry giants and startups alike as regulatory pressure mounts in California.

The stakes are higher than the pile of money Texas stands to gain if more companies set up shop in the state. Texas not only lacks robust AV regulation, but state law expressly prohibits cities from regulating the technology that will be tested and deployed on its streets. How robotaxi expansion plays out in Texas could inform how other states deal with the pioneer technology.

Governments could either come down on the side of increased skepticism or increased opportunism, Bryant Walker Smith, associate professor of law at the University of South Carolina, said in a recent interview.

“On the one hand, you could have state or local officials saying we’re really concerned about a company or a technology or the entire industry,” said Smith, who has expertise in automated driving, policy and law, “we have increasing data points that justify our concern, and we need to restrict what they’re doing in our state.”

Or, Texas might produce certain politicians or governments that see Cruise’s drama in California as an opportunity.

“They might say, mistakes are gonna happen. Human driving is dangerous, and you’re showing that your system on the whole is safer than humans, so we want you in our state. Don’t worry about all this trouble you’re getting into in California. Come here, and we’ll treat you right,” Smith explained.

As fleets expand and issues undoubtedly arise, how will Texas navigate the fine line between encouraging innovation and safeguarding its streets?

Cruise cars in reverse

Cruise, GM’s self-driving car subsidiary, has paused operations across the country and recalled its vehicles after its permits to operate in California were suspended, following an incident that left a pedestrian, who had been hit by a human-driven vehicle, stuck under and dragged by a Cruise robotaxi.

GM has poured billions of dollars into Cruise and issued it a $5 billion line of credit. It’s unlikely that GM will scrap its efforts altogether despite Cruise’s current problems and its significant cash burn; Cruise has spent $8 billion since 2017.

When Cruise does start up operations again, it may not be able — or want — to return to California. That leaves a few other markets, including Arizona and Texas. Cruise had launched a limited commercial service in Austin and Houston, and started testing in Dallas.

Cruise’s main competition, Waymo, is also eyeing an Austin expansion. The company said it would begin initial operations there in the fall, with a public ride-hail service open at a later date.

Cruise isn’t the first company to leave California for the greener regulatory pastures of Texas. Elon Musk moved Tesla headquarters to Austin, Texas after grappling with California officials during the COVID-19 pandemic over forced closures of the company’s factory in Fremont.

Austin complaints

Cruise had about 250 vehicles in Austin and was operating on limited streets during evening hours before it paused driverless operations across its fleet on October 26. Austin collected more than 50 Cruise-related complaints between August and October, many of which mirror those made by their counterparts in San Francisco.

They ranged from the fastidious, such as a resident complaining about her once quiet street now subject to countless Cruise laps, to the all-too-familiar complaint of robotaxis bricking and blocking traffic and the outright dangerous report of a pedestrian nearly struck while crossing the street.

Austin residents and agencies have expressed concern that expanding the fleet would only multiply those problems.

Ride-hailing replay

Austin has been at a similar crossroads before.

Uber and Lyft launched in Austin around 2014. Two years later, the city implemented its own ride-hailing laws that required companies to perform background checks for drivers. Rather than comply, the two companies pulled out of Austin altogether, and then ran to state legislators for help.

Before the Texas State Legislature went into session in 2017, Uber and Lyft cranked up lobbying efforts in hopes of wrestling power back away from cities.

The two firms came with “trucks of money to buy some more favorable regulation” that preempted cities across the state from enacting municipal-level regulations, according to someone familiar with the matter. Lobbying records show that in 2016, Uber and Lyft collectively paid $2.3 million through 40 lobbyists to block cities from regulating their ride-hail businesses, according to citizen group Texans for Public Justice.

Gov. Greg Abbott signed the bill for HB 100, which gave the state the power to regulate ride-hail companies, provided those companies pay an annual fee.

Uber and Lyft, both of which were pursuing robotaxis at the time, also helped successfully sway legislators to pass a similar bill during that legislative session that prohibited cities from regulating autonomous vehicles. The bill enshrined minimum safety requirements for AVs to be deployed on public roads. It also sent a signal to companies in California and elsewhere that Texas was open for business.

How city officials can fight back

Barring a high-profile incident that gets the attention of Gov. Abbott’s office, it’s unlikely the state will pursue autonomous vehicle regulation. That leaves cities with few choices.

Texas’ next legislative session is scheduled for January 2025. Austin City Council member Zo Qadri, who represents a district that covers much of the area in which Cruise was operating, told TechCrunch his office is working to push the conversation up to the state level, but he’d be surprised if the Republican-controlled legislature made changes in 2025.

“AV technology has advanced a lot faster than some doubters would have expected, but the fact is that it’s still not ready for prime time, and using public streets as testing grounds to try to eventually get it there is far less than ideal,” said Qadri. “It’s deeply unfortunate to think that while we have tried and true tools and technologies that work in cities across the world — transit, sidewalks, bike infrastructure, better land use — private companies are burning billions upon billions to try to reinvent the wheel.”

Texas cities do have one ace up their sleeves that California cities do not: the ability to ruthlessly and discriminately ticket robotaxis.

In California, a human needs to be present in a vehicle to receive a fine. But in Texas, when an AV is engaged, “the owner of the automated driving system is considered the operator of the automated motor vehicle solely for the purpose of assessing compliance with applicable traffic or motor vehicle laws…the automated driving system is considered to be licensed to operate the vehicle.”

That means Cruise — or Waymo or any other robotaxi company — is responsible for any traffic violations, collisions or general misbehavior of its vehicles.

“You could have a bunch of local police that are following the vehicles around, ticketing them for reckless driving, maintenance violations,” Smith said. “Traffic code is vague and full of opportunities for selective enforcement.”

In Texas, if a human driver accumulates too many points on their driving record within a specific time frame, their license could be suspended. The Texas Department of Public Safety might be obliged to issue a similar suspension against robotaxis should they create too much of a nuisance on public roads in cities.

More TechCrunch

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

16 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data