Robotaxis could reshape transportation — but safety, rules and public trust remain major hurdles before investors jump on board

Canadian companies are also working on self-driving technology. Toronto-based Waabi, for example, is developing artificial intelligence (AI) systems for autonomous vehicles and has attracted major funding and partnerships. While its work isn’t focused on robotaxis it’s clear that the technology could eventually be used in driverless taxis and other commercial vehicles (3).

Industry forecasts vary, but analysts expect robotaxi fleets to grow significantly over the next decade (4). Improvements in sensor technology, AI and clearer rules are helping push the tech into more cities and regions.

Even with progress, big challenges remain. Safety rules, government approval and public trust are key factors that will determine how quickly robotaxi services can grow and make a profit. Some automakers and transportation companies have already scaled back on some self-driving projects — a clear indicator that the path to success isn’t smooth when it comes to human-free driving solutions (5).

A market poised for growth

Another name brand to offer robotaxi-style services in several locations is Tesla. Most vehicles still operate with human safety supervisors, but the company is testing fully driverless rides in controlled areas — an important step toward expanding the service (6).

A more significant signal is that Tesla is planning production for a robotaxi designed without a steering wheel or pedals (7). Supporters suggest a simpler vehicle design could lower operating costs and make robotaxi rides far cheaper than traditional taxis or ride-hailing services.

Despite the excitement, expectations around Tesla’s future value are still uncertain. Some optimistic forecasts assume robotaxis will generate significant revenue, but that depends on regulatory approval, reliable technology and strong consumer adoption — all of which are still uncertain (8).

Outside North America, robotaxi growth is ramping up in parts of Asia and the Middle East, where governments are more supportive of autonomous transit. Partnerships with ride-hailing companies are helping these services roll out more quickly (9).

Even with this progress, big challenges remain. Rules differ widely between countries and cities, making it harder for companies to expand globally. Insurance rules, safety standards and permit rules are still taking shape, which adds to the uncertainty for companies and investors (10).

Public trust is another obstacle: many consumers are hesitant about riding in driverless vehicles, especially without a human driver present. Surveys show the majority — between 55% to 61% (11) — of respondents wouldn’t consider riding in a driverless vehicle (12). Until confidence improves, acceptance may take time to catch up to the technology.

For investors, robotaxis offer long-term potential — but they also come with real risks. Success will depend not only on developing technology, but on clear rules, public trust, and whether companies can make money at scale.

What potential investors should consider

For investors, robotaxis are a high-risk, high-reward bet. Much of the hype around companies like Tesla depends on robotaxis becoming widely accepted, legally approved and profitable — not on current earnings or business results. If that growth stalls, expectations could quickly shift (13).

Tesla also faces growing competition. While it remains number one in North America, some rivals already operate driverless robotaxi fleets on a limited but commercial basis, while others are scaling production and expanding into new regions (14). Beyond North America, competition is catching up, offering cheaper driverless vehicle options for more budget-conscious consumers (15).

In all areas, safety continues to be the number one concern, putting autonomous vehicle systems across the industry under close scrutiny. And Tesla has attracted significant attention following reports of vehicles behaving unpredictably in traffic. Reports involving Tesla’s self-driving technology where major issues occurred, include situations where drivers said they received little to no warning before an incident, including one where a pedestrian was fatally struck (16).