Amazon-owned Zoox has received the go-ahead from California regulators to begin ferrying passengers in its autonomous vehicles, a decision that further intensifies the race in the self-driving space.
The approval allows Zoox to operate robotaxis on California’s public roads, marking a major step in the company’s long-standing ambition to commercialize its futuristic vehicles, which notably lack a steering wheel or pedals.
The milestone comes as competition in the robotaxi market heats up, with legacy carmakers, Big Tech, and EV pioneers all vying for a dominant position. The California Public Utilities Commission (CPUC) granted Zoox the driverless deployment permit this week, officially authorizing the company to offer commercial robotaxi rides to the public.
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Zoox, which Amazon acquired in 2020 for over $1 billion, had already begun testing its uniquely designed, bidirectional vehicles without safety drivers on limited routes between its headquarters and a nearby employee parking lot in Foster City. But the new CPUC license takes the program out of the pilot phase and into a commercial rollout, albeit still limited to certain parts of the Bay Area.
The vehicle itself, more of a self-contained pod than a conventional car, is built from the ground up specifically for autonomy. With four-wheel steering, symmetrical design, and no driver cockpit, Zoox envisions a future where passengers sit face-to-face inside a robot-run ride, without ever needing to interact with a steering wheel or human operator.
“Our permit allows us to begin charging for rides in our purpose-built robotaxi on public roads. It’s a critical milestone in our deployment plan and supports our mission to make transportation safer, cleaner, and more enjoyable,” the company said in a statement Wednesday.
Tesla Ups the Ante with Next-Gen Full Self-Driving System
The Zoox announcement comes on the heels of a bold update from Tesla CEO Elon Musk, who said Wednesday that the company is currently training a new version of its Full Self-Driving (FSD) system boasting major enhancements. The upgraded system features roughly 10 times the number of parameters, which Musk said will improve its intelligence and responsiveness. It also includes major improvements in video compression, a key factor in how the system processes and understands visual input from the car’s cameras.
“Tesla is training a new FSD model with ~10X params and a big improvement to video compression loss. Probably ready for public release end of next month if testing goes well,” Musk posted on X.
Tesla’s FSD is a partially automated driving system aimed at eventually delivering full autonomy, although the company maintains that drivers must remain attentive, hands on the wheel, and ready to intervene at any time. The system builds on Tesla’s Autopilot driver-assist platform, already available in international markets like Europe and China, and uses AI models that rely on sensor and camera data to interpret real-world driving conditions.
The focus on AI has become central to Musk’s broader vision for Tesla’s future. The company has argued that autonomy—not just EV production—will drive its next phase of growth, even as it struggles with shrinking margins and stiff competition from Chinese EV manufacturers. Tesla bulls believe that its robotaxi fleet, launched earlier this year in Austin, Texas, could eventually eclipse its vehicle sales as a revenue driver.
But Tesla’s core business is facing growing pressure. Automotive revenue fell by 16% in the second quarter of 2025, and European sales have taken a hit amid broader economic headwinds and shifting consumer sentiment. Meanwhile, Tesla’s stock has been battered, down over 23% this year as of Wednesday. Some of the downturn has been linked to Musk’s strained relationship with the White House, with political tensions casting a long shadow over Tesla’s positioning in domestic policy circles.
A Market on the Verge of Disruption
The approval of Zoox’s commercial operations adds to the competition in the emerging robotaxi market. Alphabet’s Waymo and General Motors’ Cruise have already made headway in rolling out self-driving services in select U.S. cities, though Cruise suffered a major regulatory setback last year after a series of incidents led to its California license being revoked.
Zoox now joins the few companies with full commercial clearance, but the road to widespread deployment remains challenging, requiring consistent safety records, scalable operations, and sustained public trust.
Tesla’s next-gen FSD release could shift that equation. If successful, it would reinforce Musk’s bet that AI-based autonomy will outpace the more hardware-intensive approaches adopted by rivals like Waymo and Zoox, which rely heavily on lidar sensors and complex arrays of cameras and radar.
However, Zoox’s greenlight from California regulators gives Amazon a concrete foothold in the self-driving ecosystem.