Weekly Brief: Race for AV Dominance in California Hots Up

Cruise got the greenlight to launch California’s first pilot program of a fully driverless taxi service for the general public.

The California Public Utilities Commission (CPUC) says that Cruise can transport passengers in its autonomous vehicles without safety drivers behind the wheel, so long as the AVs maintain a link to a remote safety operator. Cruise cannot charge passengers for rides in its AVs. This is a significant milestone for Cruise. The start-up was founded in 2013 with the idea of creating a $10,000 kit that would retrofit any car into an AV for highway driving. In 2014 the company pivoted in the direction of building an AV platform for new vehicles. In 2016 General Motors acquired Cruise for more than $500M, inspired by the goal of launching a commercial robo-taxi service in GM vehicles powered by Cruise technology. That vision is now on the cusp of coming to fruition.

Cruise still needs a deployment permit from the California Department of Motor Vehicles before it can offer a commercial service, akin to what Waymo has in Phoenix. Back in May Cruise revealed that it expects GM to start producing its new driverless shuttle called the Origin in early 2023. If the company starts piloting with the general public in summer 2022, summer 2023 could be a realistic launch date for its commercial service. Cruise said nothing last week about when it will start shuttling the public in its vehicles.

This is also a significant milestone for California, which has actively cultivated its status as a self-driving hub for the last half decade. The state has issued more than 50 permits to different companies to test AV technology on California roads. The vast majority of those pilots have been with safety drivers behind the wheel and the state is now eager to start turning test miles into tangible transformation of its transportation system. The California Public Utilities Commission has created a program that it calls Autonomous Vehicle Passenger Service Pilot Programs to expedite the transition. Cruise is the first to be admitted but it won’t be the last.

Earlier this year Waymo applied for the same permit that Cruise received last week. It’s interesting that California approved Cruise’s application first. Perhaps it’s simply a matter of Cruise getting its application in sooner, or perhaps it’s a nod to the fact that Cruise is a San-Francisco-based company that has been testing on its city streets for longer than Waymo. Either way, Waymo is on its way. The Alphabet-owned company says that it plans to launch its commercial service in San Francisco the same way it did in Phoenix, with driver-controlled operations first and then slowly integrating AVs without safety operators.

Cruise’s presence may not permit such a measured approach in San Francisco. Waymo’s first-to-market advantage hasn’t mattered much in Phoenix but, in San Francisco the city that turned Uber into a worldwide juggernaut, it’s a different story. The Valley of the Sun in Arizona lacks the cultural cache that the City by the Bay has in spades. There’s a reason that Uber became a verb synonymous with ride-hailing. It’s taken Lyft and other competitors years to overcome that. Waymo won’t want the same thing to happen with Cruise.

However, moving quickly is something that Waymo has traditionally been loath to do. Despite being the market leader in terms of technological advancement and miles driven, the company has been slow to scale beyond one quiet suburb in Phoenix. Its leadership fashions itself as the anti-Elon Musk, determined not to make a critical safety mistake that would set the AV industry back or draw unwanted attention or public scorn, as happened with Uber’s Advanced Technology Group. It may not have a choice but to dial up some urgency in the coming years.

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