California shuts down Cruise: what the robotaxi industry must learn
California revokes Cruise's permit after GM's robotaxi subsidiary allegedly misrepresented the safety of its technology. The industry is reshuffling.
California has shut down Cruise’s robotaxi service in San Francisco: the vehicles are deemed not safe enough for public roads. For GM’s autonomous driving subsidiary, this is a setback from which a whole industry is regrouping.
What is at stake
California’s Department of Motor Vehicles (DMV) has revoked Cruise’s operating permit with immediate effect. The charge: the company misrepresented the safety of its vehicles. The move follows several incidents in recent weeks, including a collision with a fire engine on an emergency call and a serious accident in which a pedestrian was dragged under a Cruise vehicle. Back in August, after the first problems emerged with the round-the-clock licence, Cruise had already been forced to halve its SF fleet – a story I covered for Handelsblatt at the time.
What the shutdown means for Cruise
Cruise is more than an experiment for GM. The company acquired the robotaxi service for one billion dollars in 2016; according to its own projections it was supposed to generate a billion dollars in revenue by 2025 and fifty billion by 2030. In the first half of 2023 alone, losses totalled 1.2 billion dollars. The shutdown comes at the worst possible moment and throws GM’s entire autonomous driving strategy into question. Cruise can resume operations once the regulator accepts its remediation – a timeline is open.
Who benefits
Not every participant in the industry loses. Waymo, Google’s sister company, has been operating around 200 robotaxis in San Francisco so far without major incidents and is expanding its service through 2024. The National Highway Traffic Safety Administration is simultaneously examining almost 600 Cruise accidents. Whoever first emerges from California’s testing ground with stable metrics has a strong chance of setting standards for the entire industry – and influencing how autonomous driving is regulated worldwide.
What this means for Germany
“The German automotive industry is watching California very closely and will learn from this,” says Capgemini Engineering technology director Peter Fintl. BMW, Mercedes and Volkswagen are tracking every incident, every regulatory signal. The lessons: anyone operating in public road space must communicate failures transparently and maintain close contact with regulators. While Uber and Lyft sold their autonomous units long ago, the US market is becoming a testing ground whose results are being closely studied in Ingolstadt, Stuttgart and Wolfsburg.
I covered the background to Cruise’s problems for Handelsblatt in August. This post adds the latest chapter.