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(Bloomberg) -- Tesla Inc. is seeking approval to offer ride-hailing services in California, a key step by Elon Musk’s company to begin carrying paying customers while its traditional car-selling business falters.
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The electric vehicle manufacturer applied late last year for what’s known as a transportation charter-party carrier permit from the California Public Utilities Commission, according to documents viewed by Bloomberg. That classification means Tesla would own and control the fleet of vehicles.
The previously unreported application suggests Tesla is working to launch a promised ride-hailing business in the near term, opening a new revenue stream and putting it in competition with the likes of Uber Technologies Inc., Lyft Inc. and Waymo. Musk has said Tesla would roll out driverless ride-hailing in Austin in June and aimed to offer it in California by the end of the year, without offering specific details.
Shares of Uber briefly turned negative on the news and were trading up less than 1% as of 12:57 p.m. in New York. Lyft also pared gains. Tesla was little changed.
Musk has made a big bet on autonomous driving, robotics and artificial intelligence as the primary business of selling EVs struggles. Tesla recently posted its first annual sales decline in over a decade, and the first quarter shows signs of sluggishness in key markets such as the US and Europe.
In its communications with California officials, Tesla discussed driver’s license information and drug-testing coordination, suggesting the company intends to use human drivers, at least initially. Tesla is applying for the same type of permit used by Waymo, Alphabet Inc.’s robotaxi business. While Tesla has approval to test autonomous vehicles with a safety driver in California, it doesn’t have, nor has applied for, a driverless testing or deployment permit from the state’s Department of Motor Vehicles, according to a spokesperson.
It wasn’t immediately clear whether Tesla would obtain the California Public Utilities Commission permit or when the service might start. A spokesperson said in an emailed statement that Tesla’s application “is pending and not yet public.”
Casey Blaine, Tesla’s senior regulatory counsel, didn’t respond to requests from Bloomberg for comment. Several other Tesla employees who are involved in the effort also didn’t respond to inquiries.