GM’s Cruise launches robotaxi service in San Francisco

Cruise, General Motors’ driverless car unit, is opening its robotaxi service to the public in San Francisco, a development that prompted another $1.35bn investment from the SoftBank Vision Fund.

Cruise, which has been headquartered in San Francisco since its founding seven years ago, has been operating fully driverless vehicles in the city for several months, but only for its employees. On Tuesday, Kyle Vogt, co-founder and interim chief executive, said the company was “opening up our driverless cars in San Francisco to the public”.

There are some caveats: Cruise does not yet have a permit to charge customers a fee, and for now its service will only operate from 11pm to 5am, with its “operational domain” confined to the north-west quadrant of the city, an area that includes Nob Hill, Sunset, Richmond and areas around Golden Gate Park.

For at least several weeks, only a selected group of employees’ family and friends, plus applicants nominated by Cruise, will be eligible for rides.

Nevertheless, the move puts the $30bn company ahead of Waymo, the Alphabet-owned driverless vehicle group that launched more than a decade ago, in starting a driverless ride-hailing service in a big US city.

Waymo has been operating such a service in suburban Phoenix for more than two years, but the area is known for its predictably sunny weather and wide roads, whereas San Francisco is more dense and complicated.

Cruise is betting that its model of tackling more complicated cities first will let it “slingshot to other markets more quickly”, the company said.

The announcement has triggered the release of additional funds from the SoftBank Vision Fund, which first invested $900mn in Cruise in 2018. It agreed then that it would add another $1.35bn when Cruise would start operating fully driverless cars — a goal it had hoped to achieve in the summer of 2019.

Mary Barra, GM chief executive, recently took a trip in a driverless Cruise in San Francisco. She called the experience “surreal” and “a highlight” of her career as an engineer. GM’s chief financial officer, Paul Jacobson, said in an earnings call on Tuesday that Cruise would be hiring about 500 more employees.

It is difficult to determine which company is winning the race to full autonomy, given that the tech is proprietary, business models are distinct and they typically operate in different jurisdictions. Waymo has pointed out it remains the only company offering a 24/7 fully driverless service to any member of the public.

Rod Lache from Wolfe Research recently wrote that the leaders in complex, dense urban centres include Cruise, Argo, Motional, Mobileye, and possibly Waymo, “though Waymo’s progress appears to have  stalled, while Cruise  and Argo appear to be rapidly advancing their performance”.

Wolfe estimates the total potential market for driverless ride-hailing at $8tn. It has also predicted that only four or five companies will ever be positioned to compete.

Tesla remains a dark horse, with an entirely different approach to autonomy than the robotaxi groups. The electric vehicle company has no intention of operating its own robotaxi service, but it has a plan in which Tesla owners could lease out their vehicles to a nationwide network of driverless cars.

In 2019, Elon Musk, Tesla chief, said the company would be operating 1mn robotaxis by the end of 2020. So far it has none. But Musk said last week that its “full self-driving” technology would be “solved” this year.