Level 2 Loophole: Tesla Cybercabs Cruise NYC Without AV Permits
New York City DOT says Tesla's supervised Cybercab runs are Level 2 driver assistance, not Level 4 autonomy, so the company needs no AV testing permit, Gothamist reported.
Priya Nair, Safety · Sept. 18, 2026 · 5-6 min
NEW YORK - Tesla Cybercabs are cruising New York City streets without an autonomous-vehicle testing permit because city officials classify the supervised runs as Level 2 driver assistance rather than Level 4 autonomy, Gothamist reported.
More New Yorkers have spotted the sand-gold vehicles around Manhattan and Brooklyn in recent weeks. In Texas, California, and Florida, Tesla's robotaxi service offers driverless rides in cars without steering wheels, manual brakes, or side-view mirrors. In New York, Tesla is testing a "supervised" self-driving feature, with a steering wheel and a person in the driver's seat, according to the city Department of Transportation.
After Gothamist first published on the cabs, DOT spokesperson Vincent Barone said the company is not testing an "autonomous" system and therefore does not need a permit.
"New York State and New York City DOT closely regulate the testing of autonomous vehicle technology and any company that would be interested in testing such technology on city streets would be required to gain city and state approval," Barone said.
The sudden appearance contrasts with Waymo's earlier path. Alphabet's company received city and state DOT permits to test its self-driving feature with a driver behind the wheel at all times. Barone drew a distinction between Tesla's supervised "advanced driver assistance system" and an autonomous driving system. Tesla is testing "Level 2" automation, he said, compared with Waymo's "Level 4." A human must pay attention at all times and be ready to take over the Tesla, according to the DOT, while a Waymo can fully perform the driving task by itself.
That distinction lets the Cybercabs bypass significant regulatory hurdles. Tesla's deployment took the city transportation department by surprise. Officials first reached out to Tesla after spotting the cars on the road, rather than the company approaching city government first, according to a transportation department official.
The state Department of Motor Vehicles said Tesla had not applied for any autonomous vehicle testing permit. The city's Taxi and Limousine Commission said its rules do not currently allow autonomous vehicles for for-hire services. Tesla is not yet offering robotaxi service to consumers in New York.
TLC Commissioner Midori Valdivia said the commission is closely monitoring AV developments in other cities, including operational challenges and impacts on safety, congestion, emergency management, and driver pay. "Not least among our concerns is the potential impact on the livelihoods of the 180,000 hardworking drivers who keep our city moving."
Bruce Schaller, a transportation analyst who studied Uber's rise in the five boroughs, said Tesla may be following that playbook. "What Tesla may be trying to do, if you look at the Uber experience, you could speculate is that they're trying to build a constituency for the service with which to try and overwhelm the regulators," Schaller said. "But we'll have to see if that's the case or not."
Matthew Wansley, a professor who specializes in AI and autonomous vehicles at Cardozo School of Law, said Tesla has "deliberately confused the market." Tesla is "creating an illusion that they have an automated driving system for the stock market, but the technology is not there yet," Wansley said, adding that Waymo has developed such systems.
Waymo said it drove thousands of autonomous miles under a DOT permit, submitted 10 reports, and met with the transportation department more than 20 times. Gov. Kathy Hochul later withdrew support for a bill that would have allowed Waymo to launch outside city limits. "We are proud to be the first and only company to earn an autonomous testing permit from New York City's Department of Transportation, and to partner closely with the agency throughout that testing period. The entry of more operators underscores the need for a rigorous framework," Waymo spokesperson Ethan Teicher said.
A Gothamist reporter and editor earlier spotted the vehicles on Fulton Street in Lower Manhattan and at the entrance of the Brooklyn-Battery Tunnel. Both had Texas license plates and a Cybercab logo in front, with a person in the driver's seat behind a steering wheel. Tesla ignored multiple requests for comment. Job listings show the company is hiring "AI safety operators" and "data collection supervisors" for self-driving cars, based in Flushing, Queens, and in Buffalo, paying between $25 and $30 an hour.
Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said Tesla is another tech company trying to force its way into the ride-hailing market, with major questions remaining about safety. "I think the strategy continues to be to make themselves look inevitable and so they're sprinkling themselves in a number of cities across the country," she said.
Sources
Priya Nair, Safety. Priya Nair is a senior correspondent covering AV safety, regulators, and investigations. Previously covered transport policy for national outlets; based in Washington.
