Waymo autonomous taxis turns onto Post Street in San Francisco, California, US, on Wednesday, Dec. 17, 2025.

New York Gov. Kathy Hochul has pulled a proposal that would have allowed commercial robotaxi services, like Alphabet 's Waymo, to start in some parts of the state, according to her office.

"Based on conversations with stakeholders, including the legislature, it was clear that the support was not there to advance this proposal," Sean Butler, a spokesperson for the governor, said in a statement.

Hochul's reversal represents a blow to robotaxi operators like Waymo, which plans to expand its ride-hailing service to several new cities this year.

A Waymo spokesperson told CNBC in a statement that it was "disappointed" by Hochul's decision.

The decision will not affect Waymo's testing in New York City.

In August, the company received its first permit from the New York Department of Transportation to start testing in the city, an approval made under New York City Mayor Zohran Mamdani's predecessor, Eric Adams.

Waymo began testing a handful of AVs in Manhattan and downtown Brooklyn with human safety drivers on board under a permit that was extended through March.

Hochul introduced the proposal during her State of the State address last month. It outlined plans to allow for limited deployment of commercial robotaxis in the state, notably outside of New York City, a huge potential source of rider demand.

Companies interested in piloting their services would be required to submit applications that "demonstrate local support for AV deployment and adherence to the highest possible safety standards," Hochul said in her address.

The proposal drew scrutiny from labor unions, rideshare drivers and transit workers, who raised concerns about safety risks and potential job losses from robotaxis entering the New York market. It also faced the prospect of pushback from Mamdani, who has been a staunch advocate for taxi drivers.

The implications of this development extend far beyond the immediate industry impacts. Experts suggest that this could fundamentally reshape how we approach these challenges in the coming years.

According to industry analysts, the market response has been overwhelmingly positive, with stakeholders expressing optimism about the potential for long-term growth and innovation in this space.

Looking ahead, researchers and industry leaders are already planning the next phase of development, which promises to build on these initial breakthroughs and push the boundaries even further.

As this story continues to develop, our team will be monitoring the situation closely and providing updates as new information becomes available. The full ramifications of these changes may not be apparent for some time, but early indicators suggest a significant shift in the landscape.

Stakeholders are encouraged to stay informed as the situation evolves, and experts recommend taking a measured approach to understanding both the opportunities and challenges that lie ahead.