New York Gov. Kathy Hochul dropped a proposal to allow robotaxi companies to operate commercially without human safety drivers in parts of the state outside New York City, dealing a blow not just to Waymobut also to its competitors eager to crack one of the world's largest taxi markets.

The proposal, which Hochul introduced last month as part of her budget plan, would have created a framework for limited robotaxi deployments elsewhere in the state while leaving any decision about New York City to the mayor and city council.