*

Tesla's FSD software lets ride-hail drivers work longer

hours,

increasing their profit

*

Drivers report critical shortcomings with FSD, including

sudden

acceleration and braking

*

Tesla on Oct. 10 is set to unveil its robotaxi product

whose

software will be based on FSD

By Akash Sriram and Abhirup Roy

Oct 3 (Reuters) - A self-driving Tesla carrying a

passenger for Uber ( UBER ) rammed into an SUV at an

intersection in suburban Las Vegas in April, an accident that

sparked new concerns that a growing stable of self-styled

"robotaxis" is exploiting a regulatory gray area in U.S. cities,

putting lives at risk.

Tesla CEO Elon Musk aims to show off plans for a

robotaxi, or self-driving car used for ride-hailing services, on

Oct. 10, and he has long contemplated a Tesla-run taxi network

of autonomous vehicles owned by individuals.

Do-it-yourself versions, however, are already proliferating,

according to 11 ride-hail drivers who use Tesla's Full

Self-Driving (FSD) software. Many say the software, which costs

$99 per month, has limitations, but that they use it because it

helps reduce drivers' stress and therefore allows them to work

longer hours and earn more money.

Reuters is first to report about the Las Vegas accident and

a related inquiry by federal safety officials, and of the broad

use by ride-hail drivers of Tesla autonomous software.

While test versions of self-driving cabs with human backup

drivers from robotaxi operators such as Alphabet's

Waymo and General Motors' Cruise are heavily regulated,

state and federal authorities say Tesla drivers alone are

responsible for their vehicles, whether or not they use

driver-assist software. Waymo and Cruise use test versions of

software categorized as fully autonomous while Tesla FSD is

categorized as a level requiring driver oversight.

The other driver in the April 10 Las Vegas accident, who was

taken to the hospital, was faulted for failing to yield the

right of way, according to the police report. The Las Vegas

Tesla driver, Justin Yoon, said on YouTube the Tesla software

failed to slow his vehicle even after the SUV emerged from a

blind spot created by another vehicle.

Yoon, who posts YouTube videos under the banner "Project

Robotaxi," was in the driver's seat of his Tesla, hands off the

wheel, when it entered the intersection in a suburban part of

Las Vegas, according to footage from inside the car. The Tesla

on FSD navigated the vehicle at 46 mph (74 kph) and did not

initially register a sport-utility vehicle crossing the road in

front of Yoon. At the last moment, Yoon took control and turned

the car into a deflected hit, the footage shows.

"It's not perfect, it'll make mistakes, it will probably

continue to make mistakes," Yoon said in a post-crash video.

Yoon and his passenger suffered minor injuries and the car was

totaled, he said.

Yoon discussed using FSD with Reuters before he publicly

posted videos of the accident but did not respond to requests

for comment afterward.

Tesla did not respond to requests for comment. Reuters was

unable to reach the Uber ( UBER ) passenger and other driver for

comment.

Ride-hailing companies Uber ( UBER ) and Lyft ( LYFT ) responded to

questions about FSD by saying drivers are responsible for

safety.

Uber ( UBER ), which said it was in touch with the driver and

passenger in the Las Vegas accident, cited its community

guidelines: "Drivers are expected to maintain an environment

that makes riders feel safe; even if driving practices don't

violate the law."

Uber ( UBER ) also cited instructions by Tesla which alert drivers

who use FSD to have their hands on the wheel and be ready to

take over at any moment.

Lyft ( LYFT ) said: "Drivers agree that they will not engage in

reckless behavior."

GRAND AMBITIONS

Musk has grand plans for self-driving software based on the FSD

product. The technology will serve as the foundation of the

robotaxi product software, and Musk envisions creating a

Tesla-run autonomous ride service using vehicles owned by his

customers when they are not otherwise in use.

But the drivers who spoke to Reuters also described critical

shortcomings with the technology, including sudden unexplained

acceleration and braking. Some have quit using it in complex

situations such as airport pickups, navigating parking lots and

construction zones.

"I do use it, but I'm not completely comfortable with it,"

said Sergio Avedian, a ride-hail driver in Los Angeles and a

senior contributor on "The Rideshare Guy" YouTube channel, an

online community of ride-hailing drivers with nearly 200,000

subscribers. Avedian avoids using FSD while carrying passengers.

Based on his conversations with fellow drivers on the channel,

however, he estimates that 30% to 40% of Tesla ride-hail drivers

across the U.S. use FSD regularly.

FSD is categorized by the federal government as a type of

partial automation that requires the driver to be fully engaged

and attentive while the system performs steering, acceleration

and braking. It has come under increased regulatory and legal

scrutiny with at least two fatal accidents involving the

technology. But using it for ride-hail is not against the law.

"Ride-share services allow for the use of these partial

automation systems in commercial settings, and that is something

that should be facing significant scrutiny," Guidehouse Insights

analyst Jake Foose said.

The U.S. National Highway Traffic Safety Administration said

it was aware of Yoon's crash and had reached out to Tesla for

additional information, but did not respond to specific

questions on additional regulations or guidelines.

Authorities in California, Nevada and Arizona, which oversee

operations of ride-hail companies and robotaxi companies, said

they do not regulate the practice as FSD and other such systems

fall out of the purview of robotaxi or AV regulation. They did

not comment on the crash.

Uber ( UBER ) recently enabled its software to send passenger

destination details to Tesla's dashboard navigation system - a

move that helps FSD users, wrote Omar Qazi, an X user with

515,000 followers who posts using the handle @WholeMarsBlog and

often gets public replies from Musk on the platform.

"This will make it even easier to do Uber ( UBER ) rides on FSD,"

Qazi said in an X post.

Tesla, Uber ( UBER ) and Lyft ( LYFT ) do not have ways to tell that a driver

is both working for a ride-hailing company and using FSD,

industry experts said.

While almost all major automakers have a version of partial

automation technology, most are limited in their capabilities

and restricted for use on highways. On the other hand, Tesla

says FSD helps the vehicle drive itself almost anywhere with

active driver supervision but minimal intervention.

"I'm glad that Tesla is doing it and able to pull it off,"

said David Kidd, a senior research scientist at the Insurance

Institute for Highway Safety. "But from a safety standpoint, it

raised a lot of hairs."

Instead of new regulations, Kidd said NHTSA should consider

providing basic, nonbinding guidelines to prevent misuse of such

technologies.

Any federal oversight would require a formal investigation

into how ride-hail drivers use all driver-assistance technology,

not just FSD, said Missy Cummings, director of the George Mason

University Autonomy and Robotics center and a former adviser to

NHTSA.

"If Uber ( UBER ) and Lyft ( LYFT ) were smart, they'd get ahead of it and

they would ban that," she said.

Meanwhile, ride-hail drivers want more from Tesla. Kaz

Barnes, who has made more than 2,000 trips using FSD with

passengers since 2022, told Reuters he was looking forward to

the day when he could get out of the car and let Musk's network

send it to work.

"You would just kind of take off the training wheels," he

said. "I hope to be able to do that with this car one day."