CyberCabs are LIVE... Now What?

Howdy, Austin.

Welcome to Austin Founders Feed, your weekly rundown on the people, companies, events, and opportunities shaping one of the most exciting business scenes in the country.

This week, we’re looking at Tesla’s new Austin Cybercab and the federal scrutiny that followed almost immediately: no steering wheel, no pedals, and a regulatory question that could shape how driverless vehicles roll out across the country.

Here’s everything that’s happening this week:

Let’s get to it.

— Ken & Warren

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Tesla's long-awaited Cybercab is officially carrying passengers in Austin.

The gold two-seater is different from the Model Ys Tesla has already been using for its Robotaxi service because it was designed from the beginning to drive itself: no steering wheel, no pedals, and no traditional side mirrors.

Tesla began offering Cybercab rides in limited areas of Austin on September 3, marking the first commercial deployment of its purpose-built robotaxi.

But within hours, federal regulators started asking questions.

The National Highway Traffic Safety Administration opened an Audit Query into Tesla's decision to self-certify the Cybercab as compliant with federal vehicle safety standards.

Many existing federal rules were written around vehicles with traditional human controls and equipment. Cybercab was designed without many of them. Tesla's position is that the vehicle still complies with all applicable federal standards. NHTSA now wants to see the technical data and reasoning Tesla used to reach that conclusion.

Amazon-owned Zoox faced a similar challenge with its purpose-built robotaxi, which also lacks traditional controls. But Zoox ultimately went through the federal exemption process. In July, NHTSA granted Zoox temporary permission to commercially deploy up to 2,500 robotaxis per year for two years, subject to additional federal oversight.

Tesla is taking a different path.

That makes Austin the live test case for how the federal government regulates vehicles that were never designed to have a human driver in the first place. NHTSA is already working to rewrite several federal standards for autonomous vehicles. Until those changes are finished, though, the existing rules still apply.

For now, Cybercab rides are continuing.

If Tesla's interpretation holds, it could create a much faster path for purpose-built autonomous vehicles to reach American roads. If regulators decide Cybercab needs exemptions similar to Zoox, Tesla could face new restrictions before it can scale the service nationally.

Either way, Austin is helping write the playbook the rest of the country may eventually follow.

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Before Hold Out Brewing existed, brothers Grady and Matt Wright were regulars at Frank, the now-closed downtown hot dog joint that also happened to serve really good coffee.

They would stop in before work and talk about two things they loved: coffee and beer. The barista behind the counter, Matthew Bolick, was in on the conversation.

In 2013, the Wright brothers left their corporate jobs, and the three of them opened Wright Bros. Brew & Brew on Austin’s east side: a specialty coffee shop with 39 taps of craft beer. Better Half Coffee & Cocktails came next, then Hold Out Brewing, both on a former rental-car lot just west of downtown.

Today the group employs 110 people and is looking to expand further.

In March, the team took over Turnstile, the neighborhood bar at 10025 Burnet Rd. near Q2 Stadium. This fall, the space will relaunch with two concepts: Never Better and Hold Out Bar & Grill.

Grady told Austin Founders Feed the timing came down to three things. Their existing locations had reached a revenue ceiling, there was pent-up demand to grow, and Turnstile founder Mark Harris was willing to stay on and operate the location day-to-day.

The location also gives Hold Out something its downtown brewery doesn’t have: proximity to a stadium that regularly puts 20,738 people into the neighborhood. Austin FC has sold out every MLS home match at Q2 Stadium since the venue opened.

Grady’s advice for founders trying to scale in Austin: hammer out your core values before anything else. The org chart, expectations, brand, and vision all come after. Values are what unite the people you’ll need to build the business.

The expansion is being financed through private lending, and Grady says the current round will remain open for roughly another 30 days.

Hold Out Brewing is open daily at 1208 W. 4th St. And keep an eye on Burnet Road this fall.

Austin’s labor market is still expanding at one of the fastest rates in the country, even as job growth slows nationally.

The numbers:

The growth isn’t coming from a single sector. Professional services, construction, and manufacturing are all adding jobs, suggesting Austin’s economy is continuing to broaden alongside its technology base.

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