Free Waymo Rides in California? You Can Thank a Regulatory Quirk

Robotaxi companies have thrived in California, where the good weather, enthusiasm for technology, and sophisticated labor force have supported their growth for nearly two decades. But a delayed decision from a state regulatory agency is now slowing Alphabet’s subsidiary Waymo , the US leader in driverless robotaxi service.

The holdup means that Waymo isn’t yet allowed to expand into parts of Northern and Southern California. And, in an upside for riders, Waymo still isn’t able to charge California passengers for rides in its new vehicle, a pale blue Chinese-made car it’s calling the Ojai , which started picking up riders last month.

If Waymo continues to operate these vehicles in its driverless ride-hail service, they could be gratis until the end of September and perhaps beyond. (The company continues to charge for rides in its Jaguar I-Pace robotaxis, which make up the majority of its fleet.)

Unlike other states that allow robotaxis to launch testing operations and later public service without much, if any, oversight, California doesn’t allow the vehicles to hit the roads without permission. To put their autonomous vehicles on the road, companies require approval from the state Department of Motor Vehicles. They also need permission from the California Public Utilities Commission, which regulates taxi and other transportation services, to carry paying passengers.

Waymo applied to the CPUC in January to expand its service area and to add its Ojai cars to its fleet. In Northern California, its new proposed service area would span from Sea Ranch and Sacramento in the north, through Berkeley and Oakland, and into San Jose. In Southern California, it would grow past Los Angeles into Thousand Oaks and Santa Clarita, and down to the Tijuana border past San Diego.

But the process has been caught up in an unusual amount of controversy. In May, the agency asked for more information about how Waymo responds to emergency incidents , like December’s San Francisco power outage that stranded more than 60 Waymos in traffic. It also asked for new details about how Waymo makes sure that unaccompanied minors don’t ride in its cars—a violation of state law. The questions came after a labor union representing ride-hail drivers filed a formal complaint with the agency about Waymo transporting unaccompanied minors.

Now, CPUC’s Consumer Protection and Enforcement Division and Waymo have agreed to a new extension through September 25, according to Terrie Prosper, a spokesperson for the agency. Waymo’s request is “still under review, and the elements requested for approval have not been authorized,” Prosper said.