The Bubble Boat is a type of boatmobile that is, given the name, made out of blown bubbles. They only appear in and are a major plot point of the episode "Burst Your Bubble."
These new types of transportation are spherical bubbles with a bubble steering wheel and cushion. They also have two exhaust pipes on the back, also made out of bubbles. To use them, the driver steers them like a normal boat with the wheel and steps on the cushion to make it move.
There are also two other types, one is small, with a monster's head on it used by Plankton to "send fear into anyone driving" (this one was stepped on and destroyed, along with Plankton). Lastly, then there is one used by Larry, which has huge muscle arms that flex when the car moves.
Role in episode
Realizing he's the only one in town without a boat, SpongeBob makes a bubble boat which everyone in town starts to want. With bubble boats, people don't need licenses. As a result, Mrs. Puff goes out of business and has to go to Bubble Boating School, which SpongeBob owns.
During a lesson Mrs. Puff crashes into a bunch of other bubble drivers and bubble boats there on. considered unsafe.