Cruise

What did it do?

Cruise was a San Francisco-based company developing self-driving technology with the aim of operating a fleet of driverless taxis. Its original plan was to sell a limited autonomous driving kit for existing cars; after General Motors acquired it in 2016, it focused on a robotaxi service as a largely independent subsidiary. In 2022 it won permission to offer paid driverless rides in San Francisco, and it extended the service to cities such as Phoenix and Austin.

Why did it shut down?

On 2 October 2023 in San Francisco, a pedestrian who had been struck by another car ended up under a driverless Cruise vehicle, which then dragged her about 6 metres while trying to pull over. On 24 October the California Department of Motor Vehicles (DMV) suspended the company's permits with immediate effect, stating that Cruise had not shown it the dragging in their first meeting; Cruise maintained that it had shared the footage in full. The company halted driverless operations nationwide, recalled 950 vehicles, and founding CEO Kyle Vogt resigned. An independent law-firm review published in January 2024 concluded that the suspension stemmed largely from failings in leadership. Although the cars began returning to the roads in May 2024, GM stopped funding the robotaxi business in December 2024.

The story

On the night of 2 October 2023, near Market Street in San Francisco, a driver hit a pedestrian and fled the scene. The pedestrian was thrown into the adjacent lane, where a Cruise robotaxi with no safety driver on board also struck her. As the car tried to pull over, it dragged her about 6 metres; she had to be freed from under the vehicle with rescue equipment. That night marked the beginning of the end of a decade-long self-driving story.

Cruise was founded in 2013 by Kyle Vogt and Dan Kan. The first plan was to sell a $10,000 kit that would give existing cars a motorway autopilot feature. The Y Combinator graduate was bought by General Motors in March 2016, when it had around 40 employees. GM granted Cruise wide independence over technology and commercialisation. In 2018 SoftBank Vision Fund invested $2.25 billion and Honda $750 million; in January 2021 a $2 billion round joined by Microsoft and Honda lifted the valuation to $30 billion. In 2022 the company secured permission to offer paid driverless rides in San Francisco and announced a target of $1 billion in revenue by 2025. Yet in the first quarter of 2023 alone it had lost $561 million.

After the accident, the California DMV suspended the company's permits with immediate effect, stating that Cruise had not shown it the dragging in their first meeting and declaring the vehicles unsafe for the public. Cruise insisted the footage had been shared in full, but it halted driverless operations nationwide and recalled 950 vehicles for a software update. Kyle Vogt resigned in November 2023. In September 2024 NHTSA, the US road safety regulator, fined the company $1.5 million for failing to report the crash properly.

The cars began returning to the roads in May 2024, but trust did not come back. In December 2024 GM announced that it would stop funding Cruise and redirect its autonomous driving work away from robotaxis towards driver-assistance systems in personal vehicles. Cruise's absorption into GM was completed in February 2025.

Cruise shows that, with a safety-critical product, technical success alone is not enough. The company's future was decided as much by how it communicated with the regulator after the accident as by the accident itself.

Lessons for founders

• With a safety-critical product, the information you give a regulator after an accident must be complete; the perception that something was withheld can do more damage than the accident itself.
• Operating independently under a large corporate parent does not remove the risk that the parent's patience runs out after a single crisis; agree your milestones clearly with whoever is funding you.
• Before rolling a service out round the clock and across an entire city, prove your incident rates and response procedures in a small area.

Sources

1. Cruise (autonomous vehicle) (Wikipedia)
2. California DMV immediately suspends Cruise's robotaxi permit (TechCrunch, 2023-10-24)
3. GM Ends Troubled Cruise Division as Standalone Robotaxi Business (MotorTrend, 2024-12-10)
4. Cruise hit with $1.5 million fine for failing to report robotaxi crash involving pedestrian (The Verge, 2024-09-30)

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