The autonomous delivery company Nuro has been granted approval to begin commercial, driverless services on California’s public roadways – a first for any company – following the issuance of a permit from the state’s Department of Motor Vehicles.

Established in June 2016 by former Google employees Dave Ferguson and Jiajun Zhu, Nuro anticipates launching commercial delivery services in the coming year. This Autonomous Vehicle Deployment permit empowers Nuro to offer paid delivery services within San Mateo and Santa Clara counties. Initially, the company intends to utilize its autonomous Toyota Prius vehicles in a single city, collaborating with one partner starting in early 2021, as stated by Nuro’s chief legal and policy officer, David Estrada. The company plans to eventually incorporate its specifically designed R2 delivery bots into its commercial operations, while also expanding its partnerships and service areas.

Although Nuro has not disclosed the identity of its partner or the specific city, it is noteworthy that the company is based in Mountain View and has previously indicated a preference for initiating operations near its headquarters.

“The issuance of the first deployment permit represents a crucial advancement in the development of autonomous vehicles in California,” declared Steve Gordon, Director of the DMV, in a press statement released on Wednesday. “We will continue to prioritize public safety as this technology continues to evolve.”

The deployment permit authorizes Nuro to operate a fleet of low-speed driverless vehicles for commercial deliveries on public streets within designated areas of Santa Clara and San Mateo counties, encompassing the cities of Atherton, East Palo Alto, Los Altos Hills, Los Altos, Menlo Park, Mountain View, Palo Alto, Sunnyvale and Woodside, according to the DMV. These vehicles are limited to a maximum speed of 25 mph and are only permitted to operate during favorable weather conditions on roads with speed limits not exceeding 35 mph.

This announcement marks a significant year for Nuro, which also announced on Wednesday the acquisition of self-driving truck startup Ike. Furthermore, Nuro secured an additional $500 million in funding, elevating its post-money valuation to $5 billion, and achieved several important regulatory approvals at both the state and federal levels.

Nuro’s journey to obtain the deployment permit has been extensive. In 2017, the California DMV, the state agency overseeing autonomous vehicles, issued Nuro an AV testing permit that mandated a human safety driver be present in the vehicle. The company initially employed modified Toyota Prius sedans for testing and pilot grocery delivery programs in Arizona and Texas.

The company then transitioned in December 2018 to the R1, a preliminary step toward a vehicle engineered solely for package delivery. Its subsequent vehicle, the R2, was unveiled in February 2020. The R2, developed and assembled in the U.S. in collaboration with Roush Enterprises of Michigan, is equipped with lidar, radar, and cameras to provide a comprehensive 360-degree view of its surroundings. Notably, Nuro received a driverless exemption from NHTSA for its R2 vehicle, allowing it to operate without traditional side-view mirrors, a windshield, and a rear-view camera that typically shuts off when moving forward.

In April 2020, Nuro received a permit from the CA DMV to test driverless vehicles, enabling it to deploy its R2 delivery bots on public roads. While numerous companies hold active permits from the CA DMV to test autonomous vehicles with a human safety driver, AutoX, Cruise, Nuro, Waymo and Zoox are the only companies authorized to test driverless vehicles on California’s public roads.

However, Nuro was unable to charge for its delivery services until the issuance of the deployment permit announced this Wednesday.

Nuro faces a comparatively straightforward path to commercial operations compared to autonomous vehicle companies focused on providing robotaxi-style passenger transportation. Companies offering commercial ridesharing services with driverless vehicles must also secure permits from the California Public Utilities Commission to transport passengers. An additional permit from the CPUC is required to charge for these rides.

The ability to charge for rides was only recently made possible. The CPUC approved two new programs in November to allow permitted companies to offer and charge for shared rides in autonomous vehicles. The automated vehicle technology sector had been advocating for this rule change for months, seeking permission to charge fares and provide shared rides in driverless vehicles. While the decision was widely welcomed, some industry observers have cautioned that the approval process could potentially cause further delays in the launch of commercial robotaxi services.

Prospective robotaxi operators must obtain the necessary permits from both the CPUC and the California DMV, as well as adhere to several reporting requirements. Participating companies are also required to submit a safety plan and provide quarterly reports to the CPUC containing aggregated and anonymized data regarding pickup and drop-off locations, the availability of wheelchair-accessible rides, service levels for disadvantaged communities, and vehicle-related data such as fuel type, miles traveled, and passenger miles traveled.