New York Governor Kathy Hochul has withdrawn her proposal to expand commercial robotaxi services beyond New York City, dealing a blow to Alphabet's Waymo expansion plans. The governor's spokesperson cited insufficient legislative support after stakeholder discussions.

Waymo, which began testing autonomous vehicles in New York City last year with safety drivers, had sought to expand into smaller cities. The company operates paid driverless rides in San Francisco, Los Angeles, Phoenix, Austin, and Atlanta, aiming to tap into New York's large market.

The setback comes amid broader challenges for autonomous vehicle technology, which faces safety scrutiny following accidents. Industry advocates argue self-driving cars already reduce accident rates in states like Arizona and Texas, while opponents question the technology's readiness for widespread deployment.