AUSTIN (Reuters) -Tesla deployed a small group of self-driving taxis picking up paying passengers on Sunday in Austin, Texas, with CEO Elon Musk announcing the "robotaxi launch" and social-media influencers posting videos of their first rides.

Musk called the moment the "culmination of a decade of hard work" in a post on his social-media platform X and noted that "the AI chip and software teams were built from scratch within Tesla."

Teslas were spotted early Sunday in a neighborhood called South Congress with no one in the driver's seat but one person in the passenger seat. The automaker planned a small trial with about 10 vehicles and front-seat riders acting as "safety monitors," though it remained unclear how much control they had over the vehicles.

In recent days, the automaker sent invites to a select group of influencers for a carefully monitored robotaxi trial in a limited zone. The rides are being offered for a flat fee of $4.20, Musk said on X. 

Tesla investor and social-media personality Sawyer Merritt posted videos on X Sunday afternoon showing him ordering, getting picked up and taking a ride to a nearby bar and restaurant, Frazier's Long and Low, using a Tesla robotaxi app.

If Tesla succeeds with the small deployment, it still faces major challenges in delivering on Musk's promises to scale up quickly in Austin and other cities, industry experts say. 

It could take years or decades for Tesla and self-driving rivals, such as Alphabet's Waymo, to fully develop a robotaxi industry, said Philip Koopman, a Carnegie Mellon University computer-engineering professor with expertise in autonomous-vehicle technology. A successful Austin trial for Tesla, he said, would be "the end of the beginning - not the beginning of the end."

Most of Tesla's sky-high stock value now rests on its ability to deliver robotaxis and humanoid robots, according to many industry analysts. Tesla is by far the world's most valuable automaker.

As Tesla's robotaxi-rollout date approached, Texas lawmakers moved to enact autonomous-vehicle rules. Texas Governor Greg Abbott, a Republican, on Friday signed legislation requiring a state permit to operate self-driving vehicles. 

The law, which takes effect September 1, signals that state officials from both parties want the driverless-vehicle industry to proceed cautiously.

Tesla did not respond to requests for comment. The governor's office declined to comment.

The law softens the state's previous anti-regulation stance on autonomous vehicles. A 2017 Texas law specifically prohibited cities from regulating self-driving cars.

The new law requires autonomous-vehicle operators to get approval from the Texas Department of Motor Vehicles before operating on public streets without a human driver. It gives state authorities the power to revoke permits for operators they deem a public danger.

The law also requires firms to provide information on how first responders can deal with their driverless vehicles in emergency situations.

The law's permit requirements for an "automated motor vehicle" are not onerous but require firms to attest their vehicles can operate legally and safely. It defines an automated vehicle as having at least "Level 4" autonomous-driving capability under a recognized standard, meaning it can operate with no human driver under specified conditions. Level 5 autonomy is the top level and means a car can drive itself anywhere, under any conditions.

Compliance remains far easier than in some states, notably California, which requires submission of vehicle-testing data under state oversight.

Bryant Walker Smith, a University of South Carolina law professor who focuses on autonomous driving, said it appears any company that meets minimum application requirements will get a Texas permit - but could also lose it if problems arise.

"California permits are hard to get, easy to lose," he said. "In Texas, the permit is easy to get and easy to lose."

MUSK'S SAFETY PLEDGES

The Tesla robotaxi rollout comes after more than a decade of Musk's unfulfilled promises to deliver self-driving Teslas. 

Musk has said Tesla would be "super paranoid" about robotaxi safety in Austin, including operating in limited areas.

The service in Austin will have other restrictions as well. Tesla plans to avoid bad weather, difficult intersections, and will not carry anyone below age 18.

Commercializing autonomous vehicles has been risky and expensive. GM's Cruise was shut down after a serious accident. Regulators are closely watching Tesla and its rivals, Waymo and Amazon's Zoox.

Tesla is also bucking the young industry's standard practice of relying on multiple technologies to read the road, using only cameras. That, Musk says, will be safe and much less expensive than lidar and radar systems added by rivals.