General Motors is officially ending its support for Crusie’s beleaguered fleet of self-driving “robotaxis.” In a surprise announcement this week, the US carmaker said it will “realign its autonomous driving strategy” to end robotaxis and instead focus on eventually creating an autonomous personal vehicle. Cruise, which previously operated as a subsidiary, will now be fully absorbed by GM. That’s all a major departure for the driverless car company which had its sights set on offering paid robotaxis rides in multiple cities next year. Cruise previously proclaimed it planned to have close to a million of its autonomous vehicles flooding US streets by the end of the decade. In the end, safety concerns and a bungled 2023 California rollout may have left the company with wounds too deep to ever fully heal.
Soaring costs and stiff competition killed Crusie
GM revealed the news via press release Tuesday afternoon. The carmaker cited growing costs and increased competition as the primary drivers for the change. The company said it would have required “considerable time and resources” needed to properly scale the robotaxi business up to make it viable. Cruise vehicles were still being tested in multiple cities this week. Now, as part of GM, Cruise will work on improving GM’s “Super Cruise” driver assist features in its lineup of vehicles. GM says the decision to end its robotaxi business could save the company $1 billion per year.
“You have to understand the cost of running a robo taxi fleet, which is not our core business and is very expensive,” GM CEO Mary Barra said during a conference call with Wall Street analysts first reported in The New York Times.
Cruise, which maintained one of the largest robotaxi operations in the US, was primarily competing against Alphabet-owned Waymo, which already offers thousands of paid driverless rides in San Francisco, Los Angeles every day. Amazon-backed Zoox, currently testing in multiple cities, is also expected to launch its robo taxi operation in Las Vegas next year. Though Cruise’s robotaxi dreams are effectively dead, GM said it’s still holding out hope for a fully autonomous personal vehicle. The immediate focus, however, seems to be on more restrained (and less controversial) advanced driver assist systems (ADAS).
“As the largest U.S. automotive manufacturer, we’re fully committed to autonomous driving and excited to bring GM customers its benefits–things like enhanced safety, improved traffic flow, increased accessibility, and reduced driver stress,” GM senior vice president of software and services engineering Dave Richardson said in the press release.
The news reportedly came as a shock to Cruise engineers, several of whom told TechCrunch they heard about the news at the same time as the media. Others told the outlet they were “blindsided” by the change of focus and are expecting layoffs as a result. Employees speaking with TechCrunch suspect the cuts could impact non-engineering roles like government affairs and remote assistance teams that were operating in Houston, Phoenix, and other test cities. GM did not immediately respond to our request for comment but noted in its press release that it was working with Crusie to “restructure and refocus” the unit’s operations. A spokesperson from GM said it was “too early to provide specifics” regarding layoffs. The company expects the restructuring to be complete by mid 2025.
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Public pushback and safety issues plagued 2023 rollout
The surprise decision comes after Cruise has spent the better part of a year trying to repair a damaged reputation. After years of research and development, Cruise was finally granted approval to begin operating its robotaxis in San Francisco in August 2023. But within days, reports surfaced of Crusie vehicles blocking traffic, running through stop signs, and swerving to avoid people on the road. That rough rollout inspired immediate push-back and criticism from activists, some of which attached traffic cones to the hoods of cars to fool Cruise sensors and immobilize them. All of the pressure reached a boiling point in October 2023, when a pedestrian was hit by a vehicle and flung underneath a nearby Cruise vehicle. The robotaxi dragged the pedestrian for 20 feet before finally pulling over. University of San Francisco Professor and autonomous vehicle expert William Riggs previously told Popular Science that tragic mistake was likely the result of Crusie failing to consider placing sensors capable of detecting humans underneath their vehicles.
“There wasn’t a camera underneath the vehicle, the engineers couldn’t see somebody was there,” Riggs said. “It was truly something that no one had ever thought of.”
The California DMV revoked Curise’s license to operate in the state following the dragging incident. That led to the swift resignation of then CEO Kyle Vogt. Not long after that, the company laid off 900 employees, or around 24% of its workforce. After months in the dark, Cruise attempted to begin to bounce back this year. The company reportedly received $850 million in support from GM over the summer to help relaunch testing operations in Phoenix, Dallas, and Houston. Just three months ago Cruise announced a partnership with Uber that would have reportedly let ride hailers access its robotaxis through the Uber app in several cities next year. That’s no longer on the table.
Ultimately, Cruise was never able to fully recover from its botched San Francisco rollout. Polling shows drivers are still concerned about driverless vehicle safety and the repeated missteps did little to alleviate those worries. Cruise also backtracked and ceded ground to Waymo, its primary competitor, at precisely the wrong time. Waymo is already offering thousands of paid trips every day and expanding operations to more cities next. In hindsight, it’s unclear whether or not Cruise would ever be able to close that distance and release a taxi that could meaningfully compete with Waymo and other deep-pocketed rivals.
