Palo Alto, California, is exploring a partnership with Tesla to test its new robotaxi service on city streets as it evaluates the future of its rideshare program, Palo Alto Link.
According to city spokesperson Meghan Horrigan-Taylor, preliminary talks have begun, though the partnership would supplement rather than replace the existing service, which launched in March 2023, reports Palo Alto Online.
Council member Greg Tanaka sees the robotaxi project as an opportunity to address the city’s transportation challenges. “Tesla has the technology, they have the hardware, but they’re looking at test areas,” Tanaka said during the October 21 council meeting.
“That’s where Palo Alto comes in.” Tanaka, a vocal supporter of efficient budgeting, expressed concern about the costs of Palo Alto Link, saying, “I think everyone in the community loves it, but the big question we’ve all been discussing is, ‘How do we fund it?’”
The City Council is set to vote on October 28 on a proposal to extend Palo Alto Link through June 2025. Under the plan, fares would rise from $3.50 to $4 per ride, with discounted passes available for youth and seniors. Monthly passes would increase to $130, up from $65. Even with financial support from Stanford Research Park, which contributes up to $600,000 annually, the service faces a funding gap, with projected costs reaching $1.26 million for fiscal year 2025.
The partnership with Tesla, however, remains uncertain, with regulatory approval needed from the California Public Utilities Commission and the Department of Motor Vehicles. “They also assess the safety and readiness of autonomous vehicles for public roads,” Horrigan-Taylor explained.
Tesla’s robotaxi, introduced by CEO Elon Musk this month at its “We, Robot” event, impressed in a closed demo at Warner Bros. Studios, completing over 1,300 rides successfully. Tesla’s CyberCab it showed off does not have a steering wheel or any pedals. Any Tesla vehicle can become a roboxtaxi, says Tesla, with a launch pegged for 2026.
Despite some concerns, Tanaka remains optimistic about the collaboration. “The service could provide a way for Palo Alto to meet its transit goals while addressing the budget challenge,” he said.
For now, Palo Alto Link is expected to continue offering 7 a.m. to 7 p.m. service with door-to-door options for riders needing extra assistance. The service aims to address first- and last-mile transit challenges while providing affordable transportation for residents, employees, and vulnerable populations.