NEW YORK (VINnews) — Gov. Kathy Hochul has dropped a proposal that would have cleared the way for limited commercial robotaxi operations outside New York City, halting a potential expansion for autonomous vehicle companies in the state.

Her office said the plan did not have enough backing in the Legislature to advance. The reversal does not impact ongoing testing of autonomous vehicles with human safety drivers in New York City.

The proposal, unveiled earlier this year, would have permitted pilot programs for commercial self-driving ride services in areas beyond the five boroughs. Supporters said it could spur innovation and expand transportation options, while critics warned of safety concerns and possible job losses for drivers.

Labor groups, including the Taxi Workers Alliance, welcomed the decision, arguing that robotaxi expansion could threaten livelihoods.

The move is seen as a setback for Waymo, which has been testing vehicles in the city and has broader expansion plans in the United States. The company said it remains interested in bringing commercial service to New York and will continue discussions with lawmakers.

Autonomous vehicle developers including Tesla and Zoox are also developing driverless systems, as competition in the sector intensifies both domestically and abroad.