Tesla (TSLA, Financial) shares rebounded, rising around 4% in pre-market trading on Wednesday as the company secured a Transportation Charter Permit (TCP) from the California Public Utilities Commission (CPUC), marking the first regulatory step toward its robotaxi ambitions.

Unlike a Transportation Network Company permit used by Uber (UBER, Financial) and Lyft (LYFT, Financial) to connect passengers with drivers using personal vehicles, the TCP enables Tesla to offer prearranged transportation services in company-owned vehicles. Tesla, which applied for the permit in November 2024, plans to initially deploy it for transporting employees. The company will notify the CPUC when it begins providing public transportation services.

The current permit does not offer authorization to conduct autonomous vehicle tests nor provide public ride-hailing services to the public according to a spokesperson from CPUC. A complete robotaxi service operated by Tesla requires further approval by both the CPUC and the California Department of Motor Vehicles before launching.