Cruise’s setbacks reflect challenges in the AV sector

It’s been a bumpy ride for Cruise, the self-driving car company majority-owned by GM.

Cruise’s latest series of setbacks began on Oct. 2 when one of the company’s robotaxis in San Francisco dragged a woman underneath the car after she was struck by another vehicle. Cruise acknowledged that although the driverless car stopped when it struck the pedestrian, it pulled to the side of the road and proceeded to drag her 20 feet, Wired reported.

Cruise now could be looking at a fine of up to $100,000 for every time it failed to disclose information to regulators about the incident, according to Bloomberg, and California state regulators accused the company of misrepresenting key facts about the incident.

In August, San Francisco began allowing robotaxis to carry passengers without restrictions or human supervision, the first city in the country to do so, Financial Times reported.

After the October incident, California revoked Cruise’s operating permits, and it pulled its robotaxi fleet off the streets. Cruise had been operating robotaxis in several other cities, including Phoenix and Austin, with plans to further expand.

“The most important thing for us right now is to take steps to rebuild public trust,” the company said in a LinkedIn post announcing the decision to “proactively pause driverless operations across all of our fleets.”

In a Nov. 14 blog post, Cruise said it had taken additional steps “to enhance safety and transparency,” including hiring a chief safety officer, among other moves.

Then, Cruise CEO Kyle Vogt and fellow co-founder Dan Kan resigned. And GM, which has poured billions into Cruise, said it would significantly pull back spending on the startup in 2024.

“We must rebuild trust with regulators at the local, state, and federal levels, as well as with the first responders and the communities in which Cruise will operate,” GM CEO Mary Barra told investors last month.

Meanwhile, the National Highway Traffic Safety Administration is investigating Cruise over risks to pedestrians. And officials in San Francisco have reported Cruise cars blocking fire trucks, snarling traffic, and delaying emergency responses.

Cruise’s recent woes underscore the auto industry’s shift in resources to lower levels of autonomy, like systems that enable drivers to take their hands off the wheel. Technologies that automate parts of the driving experience are seen by some as the sector’s biggest growth opportunity in the coming years.

“We are at the nascent stage here, and it’s not necessarily about robotaxis—it’s about making cars slightly less stupid first,” Daniel Langkilde, CEO of Kognic—which helps clients manage troves of data from vehicles’ sensors—told Tech Brew.

“What I expect is, consumers will see gradual improvements in when they can rely on these functions, and a larger and larger group will experience them at all. And then a tiny clique will experience robotaxis for the first time,” he said. “I think that’s going to be a handful of people in California for a number of years.”