UPDATED, Dec. 29, 2020: The California Department of Motor Vehicles last week issued the state's first autonomous vehicle (AV) deployment permit to Nuro, allowing the company to launch a fee-based driverless delivery business in two Bay Area counties.

The announcement follows a testing permit issued to Nuro in April that allowed the company to test its AVs without a driver present, but limited the company from accepting any compensation. The deployment permit now grants Nuro permission to deploy its light-duty vehicles for commercial delivery services in nine cities across Santa Clara and San Mateo counties, including Mountain View, Palo Alto and Menlo Park.

Nuro will launch its service with a fleet of autonomous Prius vehicles, followed by its electric R2 vehicles. The vehicles will be limited to a maximum speed of 25 mph on streets with speed limits of 35 mph or less, and are only approved to operate in fair weather conditions, according to the DMV.

Outside of California, Nuro's R2 vehicles are also undergoing testing in Phoenix and Houston. 

Dive Brief:

• The California Department of Motor Vehicles (DMV) issued Nuro a permit to operate two self-driving delivery vehicles on select streets in the Bay Area without a safety driver present. Nuro becomes the second company to get such a permit after Waymo received its permit in November 2018. 
• The company’s R2 fleet will start service with free deliveries to some customers in Mountain View, CA, Nuro’s Chief Legal and Policy Officer David Estrada wrote in a Medium post. And due to the coronavirus, he said the approval also comes at a time when the public needs "contactless delivery services."
• The two fully driverless cars will have a maximum speed of 25 miles per hour and will only be allowed to operate in fair weather conditions on streets with speed limits of 35 miles per hour. 

Dive Insight:

Cities were increasingly seeing an uptick in interest in delivery robots and vehicles from elected officials even before COVID-19 confined many people to their homes under social distancing policies. In February, the Virginia state legislature approved a bill that would allow Amazon to operate autonomous delivery robots on roads and sidewalks. Washington, DC has also moved to expand their use. Meanwhile, Postmates announced last August it would deploy its own delivery robots to the streets of San Francisco.

Nuro had to meet a number of requirements to receive a permit, including verifying the vehicles can operate without a driver, meeting federal vehicle standards or having an exemption from the National Highway Traffic Safety Administration (NHTSA). Nuro received a temporary exemption from NHTSA in February. The company also has had a permit to test autonomous vehicles (AVs) with a safety driver present since 2017.

The new permit for Nuro comes mere months after the California DMV approved revised regulations to allow the commercial use of light-duty autonomous delivery vehicles on public roads without a safety driver. That rule only applies to vehicles weighing less than 10,001 pounds, like passenger cars, mid-size pickup trucks and cargo vans. Nuro's R2 also falls within that weight limit. 

AVs remain controversial due to concerns over their safety, with a strong federal regulatory framework still lacking from Congress, leaving states and cities attempting to fill in the gaps themselves. But both the California DMV and Nuro emphasized they will look to test these AVs in a safe manner. They will only be allowed to operate in fair weather, potentially eliminating the night-time operation that contributed to the fatal pedestrian crash in Tempe, AZ involving an Uber AV.

And Nuro said this is just the start of the process. In his Medium post, Estrada said the company is planning "various remote community engagement activities with Mountain View law enforcement and first responders" in a bid to educate the leaders and the public about how to interact with the delivery vehicles. The company hopes to eventually roll the vehicles out statewide if everything goes well, Estrada added. 

"Putting our driverless R2 delivery vehicles on the road in California will be an important first for our company and the self-driving industry," he wrote. "But it is just a glimmer of what is to come."