Cruise’s driverless taxi service in San Francisco has been discontinued

California regulators on Tuesday ordered General Motors subsidiary Cruise to end its driverless taxi service in San Francisco.

The decision by the state’s Department of Motor Vehicles led to a tumultuous three months for Cruz. In early August, state regulators allowed Cruz to expand its service in the city, over the objections of San Francisco officials. But a week later, the DMV asked Cruise to cut its fleet in the city in half.

The suspension is a major setback for Cruise, which began testing its autonomous cars in San Francisco several years ago and launched a limited driverless taxi service in the city last year.

This is an unwelcome development for the nascent driverless car industry. Big tech and automotive companies have invested billions of dollars in the technology, and expensive cars have begun to gain some mainstream acceptance in recent months. The decision by California regulators could increase calls for federal regulators to take a closer look at the technology.

“When there is an unreasonable risk to public safety, the DMV may immediately suspend or revoke permits,” the agency said in a statement. It did not say how long the suspension would last.

A Mail On X, formerly known as Twitter, Cruz said it would suspend its driverless operations in San Francisco and work on improving the cars’ technology. Cruise can still test its autonomous cars in California, but it must have backup drivers who can get to them in an emergency.

In a call with financial analysts Tuesday morning before the state action, GM Chief Executive Mary T. Parra said driverless cars have been involved in far fewer collisions than human drivers, but he acknowledged regulatory concerns.

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“We believe there is tremendous opportunity for Cruise to grow and expand,” Ms. Barra said. “Safety will be our gating factor when we do that.” He also promised that GM has plans to support Cruz’s expansion.

Ms. Parra also said GM should have more to say about Cruze in three months at an all-day investor presentation expected to take place in the first half of 2024 when it reports its fourth-quarter earnings. Call, according to the transcript of the call.

Cruise cars have drawn considerable criticism from local safety officials, who complain that they interfere with firefighting and other emergency situations. Those complaints have grown louder in recent months as cruise vehicles have been involved in several high-profile incidents.

Shortly after another state regulator, the California Public Utilities Commission, allowed the service to expand, at least 10 cruise vehicles stopped operating in the middle of a busy street in San Francisco’s North Beach neighborhood, blocking traffic for 15 minutes. A few days later, a cruise vehicle hit a city sidewalk project and got stuck in wet concrete.

A passenger in the car was injured on Aug. 17 when a fire truck responding to an emergency crashed into a taxi without Cruz’s driver, the day before the DMV announced its investigation into Cruz’s safety record.

Two weeks ago, Cruise said it released major updates to the software that powers its driverless cars to help them communicate with firefighters and other safety officials. Those updates include the ability to take over the vehicle manually. Emergency responders had to contact cruise staff and remotely control the cars as they made their way.

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On October 16, the National Highway Traffic Safety Administration opened an investigation into Cruz’s contact with a pedestrian, after a pedestrian was pinned under a Cruz vehicle that was hit by another car. Cruz said the autonomous vehicle “braked aggressively” to minimize impact and blamed the human driver for the initial impact on the pedestrian.

In a statement on X, Cruise called the incident “an extremely rare occurrence.”

At a San Francisco County Transportation Authority hearing Tuesday morning, Aaron Peskin, chairman of the city’s Board of Supervisors, said the driverless car industry “is not safe and is not immune from any government regulatory oversight.”

“If there’s any vindication for San Francisco’s position, we got it today from the Department of Motor Vehicles, albeit belatedly,” Mr. Peskin said.

As of Tuesday, Cruz was operating 50 driverless cars during the day and 150 at night.

Waymo, Cruz’s main competitor, will continue to operate its autonomous cars in San Francisco. Waymo, owned by Google’s parent company Alphabet, has so far avoided high-profile incidents. A Waymo spokeswoman declined to comment.

Matt Wansley, a professor at Cardoso School of Law in New York who specializes in emerging vehicle technologies, called on the National Highway Traffic Safety Administration to decide whether to suspend Cruz’s service in other states testing the same technology.

“If Cruz’s vehicles are unsafe in California, they must be unsafe in other states,” he told The New York Times. “There are inconsistent regulations across the country.”

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