On Oct. 2, a car hit a woman in a San Francisco intersection and flung her into the path of one of Cruise’s driverless taxis. The Cruise car ran over her, briefly stopped and then dragged her some 20 feet before pulling to the curb, causing severe injuries. And the resignations may not be over; Dan Kan, a co-founder of Cruise and the company’s chief product officer, is also stepping down, according to a source with knowledge of the events. Executives will appear before the California public utilities commission on 6 February to answer questions about the report and to help the agency determine an appropriate fine. Cruise had offered $75,000 as a settlement, but the commission is seeking a stiffer penalty.
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"Today I resigned from my position as CEO of Cruise," co-founder Kyle Vogt wrote in a post on twitter.com. "The startup I launched in my garage has given over 250,000 driverless rides across several cities, with each ride inspiring people with a small taste of the future," he also wrote. Others competitors such as Lyft, Uber and Ford Motor/Volkswagen-backed Argo AI have ended their autonomous vehicle programs, citing the massive investments needed for an unprofitable and untested industry. Stellantis has announced partnerships with BMW and Waymo, but nothing along the lines of Cruise and Argo. GM continues to operate a military defense unit and fuel cell business that have both recently announced new contracts or partnerships.
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Since the incident, Cruise has fired nine executives; its CEO and a co-founder resigned; and it cut a quarter of its staff. California suspended the company’s permission to operate autonomous vehicles in the state in October. Cruise said a report it commissioned from the law firm Quinn Emanuel found that the evidence did not establish that Cruise leadership or employees “sought to intentionally mislead or hide from regulators the details” of the 2 October incident.
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Workers will be eligible for bonuses and promotions in January, an executive said at the meeting. The company's chief administrative officer, Craig Glidden, said his focus has been on "resetting" the regulatory relationship and "building trust" and acknowledged "we still have a ways to go," according to the transcript. "I intend to work collaboratively with legal and government affairs on all the submissions that we need to make," he said.
The safety review concerned the incident and did not broadly examine corporate culture or protocols. Technological issues aside, what really put Cruise in hot water late last year was its response to the incident. Regulators accused the company of withholding information about the crash, only sharing that a Cruise robotaxi ran over a pedestrian who had been flung into its path after first being struck by a human-driven vehicle. The automaker also has discussed personal autonomous vehicles as early as mid-decade and evaluating "flying cars" for the mid-2030s, among other things that have been de-emphasized more recently.
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Walmart is an investor, and is currently testing Cruise delivery at eight stores in Phoenix. Delivery has "the potential to be a big part of the business," West said. "Our integrity, our competency are being questioned and this really hurts," said Mo Elshenawy at an all-staff meeting Tuesday, according to a transcript of the call reviewed by Reuters.
In 2021, the company said it had about 20 initiatives in its pipeline that targeted $1.3 trillion in new total addressable markets. Since the incident, Cruise's robotaxi fleet has been grounded, pending the results of independent safety probes. Its leadership has been gutted, including its cofounders resigning and nine other leaders being ousted. GM is massively cutting spending and growth plans for the business, including pausing production of a new robotaxi. The company has hired a law firm to help it conduct a safety review and has pulled all of its vehicles off public U.S. roads in the meantime. Parent GM Monday that the automaker's external review of Cruise's safety will last into the first quarter of 2024.
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Cruise and GM came under heavy criticism after Cruise failed to promptly disclose details of the incident to the California Department of Motor Vehicles. The DMV revoked the company’s permit to operate driverless vehicles on public roads, citing concerns about an inability “to respond in a safe and appropriate manner during incidents involving a pedestrian”. The automaker’s driverless car subsidiary, Cruise, announced last night the resignation of Kyle Vogt as CEO. The decision came over a month after an incident in which a hit-and-run victim became pinned under a Cruise vehicle and then was dragged 20 feet to the side of the road. As a result, California Department of Motor Vehicles suspended Cruise’s permit to operate driverless cars in the state.
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Barra and other proponents of autonomous vehicles have consistently touted that self-driving cars have the ability to significantly reduce crashes and roadway fatalities, while also providing transportation for those who may not be able to drive themselves. But commercializing autonomous vehicles didn't pan out for most, and it's been far more challenging than many predicted even a few years ago. The challenges have led to a consolidation in the sector after years of enthusiasm touting the technology as the next multitrillion-dollar market for transportation companies. "In October 2023, we paused operations of our fleet to focus on rebuilding trust with regulators and the communities we serve, and to redesign our approach to safety," Cruise said in a blog post.
"We've made significant progress, guided by new company leadership, recommendations from third-party experts, and a focus on a close partnership with the communities in which our vehicles operate. We are committed to this improvement as a continuous effort." Cruise has not announced when or where it will resume driverless operations. The company’s main operations were historically based in San Francisco, but Cruise lost its permits to operate there following the accident.
“We continue to believe strongly in Cruise’s mission and the potential of its transformative technology as we look to make transportation safer, cleaner and more accessible,” Barra stated in an email to employees, according to TechCrunch. Now Cruise appears to be going back to basics, a sharp pivot away from the aggressive growth strategy the company has been pursuing for the last few years. In 2022, former Cruise CEO and co-founder Kyle Vogt — who stepped down amid last year’s controversy — told investors that Cruise had “de-risked the technical approach” by applying what worked well in San Francisco to similar ride-share markets.
By Andrew J. Hawkins, transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. Cruise said in January that it "accepts" the conclusions found in the report. The San Francisco-based company, of which GM owns about 80%, said it will "act on all" recommendations and is "fully cooperating" with investigations by state and federal agencies following the Oct. 2 accident.
The decision by Ford and Volkswagen to pull the plug on their jointly-controlled automated vehicle operation, Argo AI, threw the entire automated vehicle sector into a tailspin. Investors have hammered the shares of public AV tech companies and driven a wave of consolidation deals. Cruise is also working to expand delivery services - a prototype of an Origin outfitted with lockers for goods is on the company's website.
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