Al Root

Waymo is hitting the accelerator, deploying its robo-taxi service to more cities and putting pressure on Tesla to do the same, soon.

Tuesday, Waymo announced it is operating in four new cities -- Dallas, Houston, San Antonio, and Orlando -- bringing its total number of cities with commercial robo-taxi service to 10. Before this update, Waymo operated in Austin, San Francisco, Los Angeles, Phoenix, Miami, and Atlanta.

Driverless cabs are on the verge of becoming ubiquitous, having been trained by artificial intelligence to handle almost any situation on the road and, more importantly, to beat human drivers in terms of safety.

The move puts more pressure on Tesla to expand its robo-taxi service, which it launched in Austin, Texas, in June. Tesla is also testing in San Francisco and plans to be in nine cities in the first half of 2026.

The importance of robo-taxis to Tesla cannot be overstated. For bullish Wall Street analysts, AI technology underpins most of its $1.5 trillion valuation.

Tesla could have several advantages over Waymo in the race to dominate robo-taxi networks: It can manufacture lower-cost cars, has a cheaper sensor suite, and has millions of Tesla owners who could add their vehicles to robo-taxi networks when the technology is ready. Still, Waymo has the lead in terms of driverless cab rides, and that lead is growing.

For now, driverless taxis are priced against, say, what an Uber ride would cost. That isn't the math that justifies Tesla's trillion-dollar valuation, though. Eventually, when there are enough robo-taxis, they will be priced based on the cost to deliver a driverless cab ride. If it's low enough, less than $1 per mile driven, it would make sense to take a cab rather than own a car. At that point, more of the 3 trillion-plus miles driven by Americans would shift over to Tesla, Waymo, and other companies trying to crack the self-driving technology.

To be sure, self-driving taxis aren't perfect. Over the past few months, Tesla has reported 17 incidents in Austin. Waymo, which operates more taxis, has reported 51, according to NHTSA data. Companies operating advanced driving systems have to report all incidents to the government.

Tesla investors weren't affected by Waymo's expansion. Tesla stock was up 0.8% at $403.18 in midday trading, while the S&P 500 and Dow Jones Industrial Average were up 0.6% and 0.8%, respectively. Shares of Alphabet, which controls Waymo, were down 0.2%.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 24, 2026 12:26 ET (17:26 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.