Will Cruise's suspension impact autonomous driving future?

Mon, Oct 30, 2023, 10:02 AM

Edge Case CEO Michael Wagner states that while Cruise has faced setbacks, the broader autonomous driving vehicle industry has been steadily advancing. He believes Cruise's suspension "is a symptom of poor safety culture at Cruise specifically" rather than the whole sector. However, Wagner highlighted this might signify a turning point for autonomous vehicles, where companies will either experience significant advancements or face collective failures.

"Safety culture and safety processes are key," Wagner tells Yahoo Finance, adding: "We have to be open about what's going on when these kinds of accidents do occur, because they will occur."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

AKIKO FUJITA: Meanwhile, General Motors driverless taxi service cruise remains halted this morning after California regulators revoked its license over public safety concerns, prompting a nationwide suspension last week. Since acquiring the company in 2016, GM has lost billions on its driverless division. In the third quarter alone, Cruise cost General Motors more than $700 million, with losses topping nearly $2 billion in 2023 so far.

Tech giant, Alphabet, another company that's betting big on a driverless future with Waymo. I recently spoke with Waymo's chief product officer about keeping safety at the forefront of Waymo's driverless technology. Take a listen to what he had to say.

SASWAT PANIGRAHI: Safety is the core of everything we do, and it's been the prime motivator for us ever since we began this. When this felt almost like a dream. And right now, the most powerful thing is, actually, we have published the results from our fully autonomous rides. From the first million, there were no injuries. There were no contacts with any vulnerable road users, like pedestrians and cyclists. We have tested 20 million plus miles.

AKIKO FUJITA: That's how many miles you've run in all the cities combined?

SASWAT PANIGRAHI: With a test driver. For example, even before we began doing all this, and that's more testing than all other companies combined.

AKIKO FUJITA: So what does Cruise's setback mean for the future of driverless cars at large? Let's bring in Michael Wagner, the CEO of Edge Case Research, a risk management partner for companies building autonomous tech.

We should point out, by the way, that Waymo is still operating. They haven't necessarily had the kind of issues that we have seen from Cruise. But now that Cruise has been halted, at least temporarily, how much of this do you see as a Cruise-specific issue? How much of this do you think can be applied to autonomous technology as a whole?

MICHAEL WAGNER: Yeah, I think it's reasonable to question the status of the autonomy technology itself. But I think if we look across the industry, things are progressing pretty well. I see this as being a symptom of, perhaps, poor safety culture at cruise specifically.

If we look more broadly throughout the industry, we do see folks producing data, talking about safety in a really meaningful and transparent way. I think that's going to be critical for getting out of this because we are in a situation, in the autonomous vehicle industry, where we're kind of at the precipice of potentially something big or maybe all having problems together.

RACHELLE AKUFFO: And, Michael, I want to talk about investment here. Because there was a report from F-Prime Capital that showed the significant decline in what we've been seeing with self-driving technology investments, I believe they said down nearly 60% compared to the previous year. Is that a result of, perhaps, some of the shine coming off this rush there was into autonomous driving, or is there something else at play?

MICHAEL WAGNER: Well, certainly, I think it would be hard to argue against a little bit of the valley of disillusionment in Gartner's hype cycle right now. But I do think the other effect that we're seeing here is that the technology is getting ready to deploy.

And so if you're looking at investments as a way of bringing in more research and development money to get the tech ready as opposed to actually operating it commercially, that could be another effect here because we are seeing the capabilities of these self-driving vehicles really start to get pretty complicated. But again, safety culture and safety processes are key. We have to be open about what's going on when these kinds of accidents do occur because they will occur.

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Will Cruise's suspension impact autonomous driving future?

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