Governor Kathy Hochul has withdrawn a proposal that would have allowed commercial robotaxi services to expand across New York State, marking a significant setback for autonomous vehicle companies seeking to operate beyond New York City.

The governor's spokesperson, Sean Butler, confirmed Thursday (February 19) that the measure has been removed from the state budget proposal. "Based on conversations with stakeholders, including in the legislature, it was clear that the support was not there to advance this proposal," Butler said in a statement to TechCrunch.

The withdrawn proposal would have amended state vehicle and traffic laws to permit self-driving vehicle deployment in cities with populations under one million. Under the plan, autonomous vehicle companies would have needed approval from the state's transportation commissioner, paid a $1 million fee, and provided proof of at least $5 million in financial security. The state would have only backed robotaxi pilots in areas demonstrating clear local support.

The move represents a major disappointment for Alphabet's Waymo, which currently operates commercial robotaxi services in Atlanta, Austin, Miami, Phoenix, Los Angeles, and the San Francisco Bay Area. The company provides more than 400,000 paid rides every week and targets reaching one million weekly rides by year's end. According to The Guardian, Waymo received its first permit to test autonomous vehicles in New York City last year, though testing requires a trained specialist behind the wheel.

"While we are disappointed by the Governor's decision, we're committed to bringing our service to New York and will work with the State Legislature to advance this issue," a Waymo spokesperson told TechCrunch. "We hear from thousands of New Yorkers who have experienced Waymo in other cities and want access to it at home."

The proposal's removal follows fierce opposition from transit workers, rideshare drivers, and taxi drivers who argued the expansion would cause massive job losses. The People First Transportation Alliance now urges Albany to pass legislation requiring a human driver behind the wheel in every vehicle. "We urge the Legislature and the Governor to now pass legislation requiring a human driver behind the wheel in every vehicle and a comprehensive study leading to a plan to address the impact driverless cars would have on New York State," Brendan Sexton, president of the Independent Drivers Guild, said in a statement reported by The New York Post.

Technology advocates criticized the decision as shortsighted. "Autonomous vehicles are already driving down accident rates and improving pedestrian safety in Arizona, California and Texas. It's disappointing that Governor Hochul is withdrawing her proposal, because New Yorkers deserve the same proven protections," Adam Kovacevich, CEO of Chamber of Progress, told The Guardian.

State Senate Transportation Committee Chairman Jeremy Cooney also opposed the withdrawal, calling it "a real opportunity to increase driver and pedestrian safety across our state."

With the proposal dead, New York's existing autonomous vehicle pilot program remains in place. Under that program, companies can seek exemptions to the state's one-hand-on-the-wheel rule for testing purposes but cannot launch commercial robotaxi services. Waymo's current testing permit in New York City runs through March 31. The state budget deadline is April 1.

Christa Cooper