Two months ago, Cruise CEO Kyle Vogt gasped as he recounted how a driver had killed a 4 year old girl in a stroller at a San Francisco intersection. “It barely made the news,” she said, pausing to compose herself. “I’m sorry. I get emotional.”
To make streets safer, he said in an interview, cities should adopt autonomous vehicles like those designed by Cruise, a subsidiary of General Motors. They don’t get distracted, drowsy or drunk, she said, and being programmed to put safety first means they could substantially reduce car-related deaths.
Now, Vogt’s self-driving car company faces its own safety problems as he grapples with angry regulators, anxious employees and skepticism about his management and the viability of a business he has said many times will save lives and generate thousands of dollars. millions of dollars.
On October 2, a car hit a woman at a San Francisco intersection and threw her into the path of one of Cruise’s driverless taxis. The Cruise car hit her, stopped briefly, and then dragged her about 20 feet before stopping on the sidewalk, causing her serious injuries.
Last week, the California Department of Motor Vehicles accused Cruise of omitting the drag of the woman from a video of the incident he initially provided to the agency. He The DMV said the company had “misrepresented” its technology and told Cruise to shut down its driverless vehicle operations in the state.
Two days later, Cruise went further and voluntarily suspended all of its driverless operations nationwide, removing about 400 driverless vehicles from the roads. Cruise’s board has since hired law firm Quinn Emanuel to investigate the company’s response to the incident, including its interactions with regulators, law enforcement and the media.
The board plans to evaluate the findings and any recommended changes. Exponent, a consulting firm that evaluates complex software systems, is conducting a separate review of the accident, said two people who attended a company-wide meeting at Cruise on Monday.
Cruise employees fear there is no easy way to fix the company’s problems, five former and current employees and business partners said, while rivals fear Cruise’s problems could lead to stricter rules for self-driving vehicles. for all of them.
Company experts blame what went wrong on a technology industry culture, led by Vogt, 38, that prioritized program speed over security. In the competition between Cruise and its main driverless vehicle rival, Waymo, Vogt wanted to dominate the same way Uber dominated its smaller competitor, Lyft.
“Kyle is a guy who is willing to take risks and is willing to act quickly. He is very Silicon Valley,” said Matthew Wansley, a professor at Cardozo Law School in New York who specializes in emerging automotive technologies. “That explains both Cruise’s success and his mistakes.”
When Vogt spoke to the company about its suspended operations on Monday, he said he did not know when they could start again and that layoffs could occur, according to two employees who attended the company-wide meeting.
He acknowledged that Cruise had lost the public’s trust, employees said, and outlined a plan to regain it by being more transparent and putting more emphasis on safety. She named Louise Zhang, vice president of security, as the company’s interim chief security officer and said she would report directly to her.
“Trust is one of those things that takes a long time to build and only a few seconds to lose,” Vogt said, according to attendees. “We need to get to the bottom of this and start rebuilding that trust.”
Cruise refused to make Vogt available for an interview. GM said in a statement that its “commitment to Cruise’s marketing goal remains strong.” He said he believed in the company’s mission and technology and supported its measures to put safety first.
Vogt began working on autonomous vehicles when he was a teenager. When he was 13, he programmed a Power Wheels toy car to follow the yellow line in a parking lot. He later participated in a government-sponsored autonomous vehicle competition while studying at the Massachusetts Institute of technology.
In 2013, he founded Cruise Automation. The company retrofitted conventional cars with sensors and computers to operate autonomously on roads. He sold the business three years later to GM for $1 billion.
After closing the deal, Dan Ammann, GM’s president, took over as CEO of Cruise and Vogt became its president and chief technology officer.
As president, Vogt built Cruise’s engineering team as the company expanded from 40 to about 2,000 employees, former employees said. He advocated bringing cars to as many markets as quickly as possible, believing that the faster the company moved, the more lives it would save, former employees said.
In 2021, Vogt took over as CEO. Mary T. Barra, GM’s chief executive, began including Vogt in presentations and earnings calls, where she touted the autonomous vehicle market and predicted Cruise would have one million cars by 2030.
Vogt pushed his company to continue its aggressive expansion, learning from the problems his cars encountered while driving in San Francisco. The company charged an average of $10.50 per ride in the city.
After Cruise vehicle collided with a Toyota Prius When driving in a bus lane last summer, some people at the company proposed that their vehicles temporarily avoid streets with bus lanes, former employees said. But Vogt vetoed that idea, saying Cruise’s vehicles needed to continue driving on those streets to master their complexity. The company later changed its software to reduce the risk of similar accidents.
In August, a self-driving Cruise car collided with a San Francisco fire truck that was responding to an emergency. The company later Changed the way your cars detect sirens..
But after the accident, city officials and activists pressured the state to curb Cruise’s expansion. They also asked Cruise to provide more crash data, including documentation of unplanned stops, traffic violations and vehicle performance, said Aaron Peskin, president of the San Francisco Board of Supervisors.
“Cruise’s corporate behavior over time has increasingly led to a lack of trust,” Peskin said.
With its business frozen, there are concerns that Cruise is becoming an undue financial burden on GM and damaging the auto giant’s reputation. Barra told investors Cruise had a “tremendous opportunity to grow” just hours before the California D.MV. he told Cruise to shut down its driverless operations.
Cruise has not collected fares or carried passengers in more than a week. In San Francisco, Phoenix, Dallas, Houston, Miami and Austin, Texas, hundreds of Cruise’s white and orange Chevrolet Bolts remain stuck. The closure complicates Cruise’s ambition to reach its goal of $1 billion in revenue by 2025.
GM has spent an average of $588 million per quarter on Cruise over the past year, a 42 percent increase from the previous year. Each Chevrolet Bolt that Cruise operates costs between $150,000 and $200,000, according to a person familiar with his operations.
Half of Cruise’s 400 cars were in San Francisco when driverless operations were halted. These vehicles were supported by a large operations staff, with 1.5 workers per vehicle. Workers stepped in to help company vehicles every 2.5 to five miles, according to two people familiar with their operations. In other words, they often had to do something to remotely control a car after receiving a cellular signal that it was having problems.
To cover its rising costs, GM will need to inject or raise more funds into the business, said Chris McNally, financial analyst at Evercore ISI. During a call with analysts in late October, Barra said GM would share its financing plans before the end of the year.
