WASHINGTON (Reuters) - In a first-of-its-kind approval by U.S. regulators, a federal agency on Thursday gave permission for autonomous vehicle startup Nuro Inc over the next two years to deploy up to 5,000 low-speed electric delivery vehicles without human controls like mirrors and steering wheels.

Nuro R2, a self-driving delivery vehicle, is shown in an undated photo in Houston, Texas, U.S. Nuro Inc/Handout via REUTERS

The rollout of the R2 vehicle will take place in Houston, with plans for it to deliver items like pizza and groceries. It is about half the width of a regular car, has no steering wheel or seating positions and boasts gull-wing cargo doors reminiscent of the time-traveling car in the “Back to the Future” films.

Nuro, a privately held robotics company based in Mountain View, California, said it will begin public road testing to prepare deliveries in Houston in the coming weeks. Nuro called the regulatory approval by the National Highway Traffic Safety Administration “a milestone for the industry.”

Americans “waste a lot of time running errands,” Nuro said, adding that it envisions “a future where everything comes to you, on-demand, for free.”

The agency's approval of Nuro's petition will allow the company to deploy the R2, a vehicle designed to have no human occupants and operate exclusively with an automated driving system, as part of a delivery service for restaurants, grocery stores and others. Walmart Inc WMT.N and Domino's Pizza DPZ.N said last year they would launch pilot delivery projects with Nuro in Houston.

The R2, which Nuro describes as an “electric-powered delivery robot,” is designed to make short trips and will be restricted to pre-mapped neighborhood streets. Nuro told NHTSA in its October 2018 petition that the R2 vehicles will at all times be monitored by remote human operators who can take over driving control if needed.

Automakers must meet about 75 auto safety standards to win such regulatory approval, many of which were put in place with the assumption that a licensed human driver would be in control.

The approval followed three years of talks between the government and Nuro. U.S. lawmakers have spent years trying to overhaul federal laws to speed deployment of self-driving vehicles.

Transportation Secretary Elaine Chao said in a statement that for Nuro “certain features that the department traditionally required - such as mirrors and windshield for vehicles carrying drivers - no longer make sense.”

‘GREATER OVERSIGHT’

The agency said it issued the approval with such exemptions, the first time it ever approved a petition to allow deployment of automated driving systems without meeting all existing U.S. auto safety standards. NHTSA said as a condition of its approval it would require “greater oversight of the R2 than typical for an exempt vehicle” including “required outreach to the communities where the R2 will be deployed.”

Nuro said despite the approval, regulators “must modernize the existing regulations that never envisioned a vehicle without a driver or occupants.”

Because the R2 is classified as a low-speed neighborhood vehicle, it does not need to meet all safety requirements of traditional vehicles.

Nuro partnered with Michigan-based supplier Roush to build the R2 with 65% more compartment space than the prior version, new temperature controls to keep food fresh and a larger battery pack to enable all-day operation.

NHTSA said the R2 includes the same automated driving system present in Nuro’s prior “R1” vehicle.

Nuro, which was co-founded in 2016 by two former engineers of Google's self-driving car project, said last year it raised $940 million from SoftBank Group Corp 9984.T, which valued the Silicon Valley-based company at $2.7 billion. The funding by SoftBank came through its $100 billion Vision Fund.

Nuro has worked with grocery store chain Kroger Co KR.N since 2018 on a pilot project to deliver groceries autonomously, first in Scottsdale, Arizona and then in Houston.

NHTSA is requiring real-time reporting about safety issues, regular meetings with the agency and community engagement in deployment areas.