Jeff Bezos gains edge on Musk with approval to deploy no-wheel Zoox robotaxis

Amazon’s Zoox won federal clearance on Thursday to start charging passengers for rides in robotaxis that have no steering wheel and no pedals.

With this approval from the National Highway Traffic Safety Administration (NHTSA), Jeff Bezos has scored a win over Elon Musk in the race to put driverless cars on city streets.

Has Zoox overtaken Tesla?

For the first time, the U.S. government has given approval for a vehicle designed without any manual controls. The National Highway Traffic Safety Administration (NHTSA) cleared Amazon’s (NASDAQ: AMZN) self-driving unit, Zoox, to charge passengers for rides in robotaxis that have no steering wheels or pedals.

Notably, Zoox received approval to operate despite the fact that federal safety rules are still written with the assumption that a human sits behind a wheel. The company has already carried passengers for free in Las Vegas and San Francisco, with free service also running in Austin and Miami. It will launch paid rides starting in Las Vegas, with plans to expand to other cities as it clears state and local rules.

The company says more than half a million people have already ridden in its vehicles, covering over 3 million miles before this approval.

Meanwhile, Tesla (NASDAQ: TSLA) is still testing its own “Cybercab” robotaxi, which also lacks a steering wheel. However, Tesla is still running paid rides in cars that have steering wheels and pedals.

Are Bezos and Musk rivals?

Bezos and Musk are already competing in space exploration, with Blue Origin and SpaceX both building landers for NASA’s Artemis program.

The new approval puts Amazon ahead of Tesla on land, but it comes with strict rules and can be revoked if safety issues arise. The Advocates for Highway and Auto Safety group said Zoox did not show enough evidence that a car without standard controls is safe on public roads.

Earlier this month, Zoox recalled its 105 active robotaxis to fix software that might miss heavy smoke.

The NHTSA’s administrator, Jonathan Morrison, stated that the vehicles meet the safety standards set for conventional cars. However, he also added that the agency wants proof the driving system works well over time.

Zoox, which Amazon (NASDAQ: AMZN) bought for $1.2 billion, is a carriage-shaped vehicle built from the ground up for autonomous driving. It has benches that face each other and reaches a top speed of 75 miles per hour. The longer-term plan for the company is to build a plant near Silicon Valley capable of turning out as many as 10,000 robotaxis a year.

Under the current permit, Zoox can deploy up to 2,500 vehicles per year over the next two years, but the company now faces tighter oversight, including extra reporting on crashes and on cars that stop where they should not.

Notably, Musk called Bezos a copycat back in 2020 when Amazon acquired Zoox. Both companies trail Alphabet’s (NASDAQ: GOOGL) Waymo, which runs in more than 10 cities and logs around 500,000 rides a week.

If you're reading this, you’re already ahead. Stay there with our newsletter.