Tesla gets approved to offer ride-hailing service in Arizona

Tesla Inc. has been cleared to offer ride-hailing services in Arizona, one of the states where the carmaker will eventually operate a robotaxi business.

The Arizona Department of Transportation granted the automaker a transportation network company permit on November 17, the agency said Tuesday (November 19) in an emailed statement. Tesla needed this license to operate a ride-hailing service in the state.

Arizona is among the states where Chief Executive Officer Elon Musk has predicted Tesla will operate what he’s referred to as robotaxis by the end of the year.

Also Read: Tesla's stock rises as Elon Musk buys more than 2.5 million shares worth about $1 billion

The company has yet to offer rides in vehicles without human safety monitors present in the driver or front passenger seat of cars that consumers can summon in Austin and the San Francisco Bay area, the first two markets where Tesla is offering a hailing service.

Tesla’s efforts to stand up a robotaxi business and catch up with Alphabet Inc.’s Waymo — which has operated in the Phoenix area since late 2018 — are being closely watched by investors. Musk has increasingly emphasised the company’s work on autonomy, robotics and artificial intelligence as its core business of selling cars has slowed.

The other states Musk has said he expects Tesla to be operating taxi services by the end of the year are Nevada and Florida. The company didn’t immediately respond to a request for comment on Arizona’s announcement.

Also Read: Will Elon Musk quit Tesla over pay package? Here's what Tesla board had to say to shareholders

Tesla shares rose 0.6% as of 5:30 a.m. Wednesday in New York, before the start of regular trading. The shares have slipped less than 1% for the year, trailing the 13% advance in the S&P 500 Index.Read about our editorial guidelines and ethics policy