The most populous state in the U.S. is about to see a major change on its roadways -- and that could mean forward-thinking tech firms may see the same on their bottom lines.
The California Department of Motor Vehicles on Monday, Feb. 26, eliminated a requirement for autonomous vehicles to have a person in the driver's seat, effectively clearing the way for fully driverless cars on California roads as soon as the rule goes into effect April 2.
The state has given 50 companies license to test self-driving technology in California already. Under the updated rules, the companies will be required to maintain the ability to operate the driverless vehicle remotely and communicate with law enforcement should something go awry.
Many of the leading driverless tech companies have begun testing already in Arizona, where state regulators have approached self-driving cars in a very hands-off manner. Waymo, which is owned by Action Alerts Plus holding Alphabet Inc. (GOOGL) , started testing driverless cars without a human presence in October in Arizona. Ride-hailing company Uber Technologies Inc. also tests in Arizona, but with drivers in the front seat.
This recent development in California is significant, though, as many of the top driverless tech companies are based in the state. Plus, California is a much larger state both by area and by population than Arizona. That means Alphabet's Waymo and Uber could soon get a more realistic idea of what truly driverless technology will look like under more stressful but realistic conditions. L.A. traffic doesn't play around, after all.
But it's not just Waymo and Uber that could benefit. Researchers at Action Alerts Plus holding Apple Inc. (AAPL) last fall revealed a new method that driverless cars could use to detect pedestrians and cyclists. Monetizing that technology down the road could become a major source of income should self-driving cars become the norm.
A similar case could be made for Action Alerts Plus holding Nvidia Corp. (NVDA) , which answers the call for the highly powerful processors needed in autonomous vehicles. The company announced at the Consumer Electronics Show earlier this year its Xavier system-on-a-chip for artificial intelligence car platforms.
Also at the CES this year, Action Alerts Plus holding Amazon.com Inc. (AMZN) , Intel Corp. (INTC) and Cisco Systems Inc. (CSCO) made announcements about driverless technology. It's certainly not just Tesla Inc.'s (TSLA) game anymore.
Removing a human from the front seat is an important psychological barrier driverless tech companies need to cross before truly autonomous vehicles hit the road. With 39.25 million people in California, the Golden State seems a good a place as any to continue testing.
TheStreet has the latest in tech coverage here: