Jan 25, 2024 - Business

Cruise "deeply remorseful" after scathing report on robotaxi pedestrian incident

A Cruise vehicle in San Francisco, California on July 24, 2023.

A Cruise vehicle in San Francisco. Photo: Tayfun Coskun/Anadolu Agency via Getty Images

Cruise's loss of its robotaxi license in California was "a self-inflicted wound" caused by poor leadership, colossal mistakes in judgment and an "us vs. them" mentality with regulators, according to an independent report released Thursday.

Why it matters: The General Motors-owned startup was once seen as a leader in autonomous vehicle technology, with bold plans to deploy robotaxis in more than a dozen cities this year.

  • Now it must try to rebuild its damaged reputation by overcoming safety concerns and a lack of public trust.
  • Understanding Cruise's mistakes could help the entire industry learn from the incident, strengthen protocols and improve technology.

Catch up fast: On Oct. 2 in San Francisco, a hit-and-run driver struck a pedestrian and launched her into the path of a Cruise robotaxi, which also hit her.

  • The Cruise car then pulled forward 20 feet, dragging the pedestrian underneath the car.
  • The sequence of events caused serious injuries, but the post-collision dragging wasn't fully shared with regulators or the media.

Driving the news: After a three-month investigation, law firm Quinn Emanuel Urquhart & Sullivan found that Cruise leaders and employees didn't intentionally deceive or mislead regulators.

  • Rather, a combination of technical difficulties, bad decisions and misplaced priorities caused them to omit vital information from their public disclosures.
  • The firm's report blames "a failure of leadership within Cruise, inadequate and uncoordinated internal processes, mistakes in judgment, an 'us versus them' mentality with government officials and a fundamental misunderstanding of regulatory requirements and expectations."

Zoom in: Some Cruise employees knew about the dragging incident but didn't share that information with colleagues tasked with explaining the accident to regulators the day after the episode, the report found.

  • Instead, they learned about it "on the fly" while watching the video with state and federal safety officials — which left them unprepared for the subsequent grilling, according to a source familiar with the investigation.
  • Even after Cruise officials became aware of the full video showing the pedestrian being dragged, they did nothing to update the media or the public.
  • Instead, company leaders were fixated on making sure the media knew its robotaxi had not initially caused the hit-and-run accident as was reported by some news outlets, the report found.

The fallout: After the incident, co-founder and CEO Kyle Vogt resigned, nine executives were dismissed, and others departed because of staff reductions.

  • Cruise canceled its expansion plans and laid off 24% of its employees in mid-December.

What they're saying: "We are profoundly remorseful both for the injuries to the pedestrian, as well as for breaching the trust of our regulators, the media, and the public," Cruise said in a blog post Thursday.

  • The company says it's fully cooperating with other investigations by various state and federal regulatory and enforcement agencies, including the California DMV, the California Public Utilities Commission, the National Highway Traffic Safety Administration, the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

A separate probe by an outside engineering firm, Exponent, examined the technical root cause of the accident.

  • It determined that the Cruise robotaxi accurately detected, classified and tracked both the pedestrian and the human-driven vehicle, and that the impact with the Cruise car was caused by the pedestrian being launched into its path by the hit-and-run driver.
  • Crucially, the robotaxi incorrectly classified the collision with the pedestrian as a side-impact collision, which led it to pull over rather than make an emergency stop.

The big picture: Cruise is one of the biggest bets GM has made under CEO Mary Barra, who insists GM and Cruise are still committed to a self-driving future.

What to watch: Cruise is plotting a slow return to service, starting in one city — likely in Texas or Arizona.

  • It's no longer welcome in California.

What's next: "For this new technology to unfold on a safe basis ... it's not just making sure that avoidable mistakes are prevented now, but it's reaching that point where we could have real safety improvements through these technologies," U.S. Transportation Secretary Pete Buttigieg told Axios in an interview Thursday.

Editor's note: This story has been corrected to reflect that nine executives were dismissed after the incident, with Vogt resigning and others departing as part of staff reductions.

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