General Motors Ends Cruise, Casting Doubt on Robotaxi Future

What Happened

This week the CEO of General Motors (GM) Mary Barra announced the company would end funding for its robotaxis program known as Cruise.

She cited time and costs as the reasons for suspending the once touted project. The surprising move comes more than a year after Cruise had paused its robotaxis service, during which time several spokesmen for General Motors had continued to insist the project had a bright future.

General Motors stated they remain committed to self-driving technology. But the company will focus on self-driving cars sold directly to consumers instead of ride-sharing or robotaxis like Cruise. 

Why it Matters

According to Jessica Mathews of Fortune:

‘Cruise was supposed to be the shiny new piece of technology that could reposition $57 billion General Motors from a legacy automaker into a true, innovative Tesla rival for the auto industry’s next chapter. And for a while, it was. Cruise was the first company to launch a paid fare operation in San Francisco, and, at one point, it had 4,000 employees in Seattle, Phoenix, Austin, Dubai, and in Japan.’

The complexity of operating robotaxis combines the obstacles associated with self-driving technology with the challenges of managing a taxi service. That includes a large customer service operation, making it a daunting prospect for automakers. 

Not to mention the significant safety concerns for robotaxi services. In October 2023 a Cruise robotaxi in San Francisco struck a woman and then dragged her some twenty feet before stopping.

During the incident, the woman was first hit by another car driving next to the robotaxi. The impact unexpectedly forced her into the car’s path, a scenario the vehicle’s technology suite was unable to anticipate.

Further complicating the situation, after being struck the women was knocked down, placing her body below the detection range of the robotaxi’s lidar scanning system. Though injured, the woman did survive.

Nevertheless, the incident dealt a significant blow to Cruise’s reputation, which has never recovered. 

How it Affects You

Automakers and technology companies have made big promises, and investments, for both self-driving vehicles and robotaxis services. But so far, overcoming the technical challenges has remained elusive.

While the ideas for both remain popular, safety concerns may prevent potential riders from using what is already available. This makes widespread adoption even more difficult and expensive. 

Like General Motors, other major auto companies, including Volkswagen (VOW.DE) and Ford (F) have moved away from robotaxi programs after initial large investments.

Alphabet (GOOG) is still actively operating both self-driving vehicles and robotaxis in several major American cities, and Telsa (TSLA) has announced plans to debut a robotaxi service in 2025.

Meanwhile the safety, regulatory, and technological hurdles for robotaxis remain significant barriers to widespread operations.