Cruise’s Robotaxis to Join Uber’s Ride-Hailing Service

Cruise, the autonomous vehicle company, is set to integrate its robotaxis with Uber’s ride-hailing service next year. This partnership marks a significant shift for both companies, which previously seemed to be rivals in the transportation market.

Change of Direction for Cruise

This collaboration comes after Cruise faced challenges, particularly when its California permit for driverless rides was suspended in October 2023. This suspension followed a serious incident where a Cruise robotaxi dragged a pedestrian who had been hit by another vehicle across a dark San Francisco street.

Regulatory Scrutiny and Corporate Reactions

The unfortunate incident led to increased regulatory scrutiny for Cruise and caused General Motors (GM), its parent company, to scale back its ambitious plans for autonomous driving. GM had initially projected that Cruise could generate $1 billion in yearly revenue by 2025, as it planned to expand its robotaxi services beyond San Francisco and into other cities, offering a driverless alternative to Uber and Lyft.

New Business Model

Now, GM and Cruise are shifting strategies by combining the robotaxis with Uber’s traditional human-driven vehicles. This allows passengers to choose an autonomous ride if they prefer. However, the financial aspects of this partnership have not been disclosed, nor have the specific cities where Uber plans to launch Cruise’s robotaxis next year.

California Excluded

As it stands, California will likely not be included in this rollout, since Cruise’s operating license in the state remains suspended.

Waymo’s Expansion

In contrast, Waymo, a company spun off from Google, is broadening its robotaxi services beyond San Francisco, reaching other areas in the Bay and Southern California. Recently, Waymo reported that its robotaxis are completing over 100,000 paid rides each week, including operations in Phoenix, where it has been active for several years.

Current Operations and Future Goals

Currently, Cruise is operating Chevy Bolts in Phoenix and Dallas, with a human driver present in case of emergencies. The partnership with Uber highlights Cruise’s commitment to achieving fully autonomous driving.

Vision for Safer Streets

“Cruise aims to utilize driverless technology to enhance street safety and transform urban living,” stated Cruise CEO Marc Whitten, who took over after the resignation of Cruise founder Kyle Vogt following the suspension of their California license.

Financial Challenges for GM

In response to setbacks in California, GM has had to lay off hundreds of employees and tighten its budget after reporting $5.8 billion in losses from the robotaxi services between 2021 and 2023. In the first half of this year, GM reported an operating loss of $900 million related to Cruise, although this was an improvement from nearly $1.2 billion at the same time last year.

Uber’s Optimism

Despite these challenges, Uber CEO Dara Khosrowshahi expressed optimism about the partnership, believing Uber can play a crucial role in safely and effectively introducing autonomous technology to consumers and cities globally.