GM Cruise Gets California’s OK to Charge Fares for Robotaxis

Cruise LLC, the self-driving startup majority owned by General Motors Co., won permission from California regulators to charge for rides in San Francisco, marking a seminal moment for the company and for autonomous vehicles.

A Cruise self-driving car, which is owned by General Motors Corp, won permission from California regulators to charge for rides in San Francisco.  (REUTERS)

Cruise LLC, the self-driving startup majority owned by General Motors Co., won permission from California regulators to charge for rides in San Francisco, marking a seminal moment for the company and for autonomous vehicles.

The go-ahead came Thursday from the California Public Utilities Commission. Cruise started offering free rides to the public in San Francisco in February. Once the company establishes the business in the city, it can expand to other California markets and eventually other states.

Few companies have been confident enough to put autonomous vehicles on roads without a test driver. And there is very little revenue, if any, being generated by the many companies that have spent billions of dollars to develop the suite of remote-sensing products and software for robotic driving.

Charging fares is the beginning for Cruise, which aims to reach $50 billion in revenue by 2030 and challenge Uber Technologies Inc. and Lyft Inc. in the ride-hailing business. GM believes Cruise can be a big contributor to the automaker, helping the parent double revenue by the end of the decade. 

As the business scales up, Cruise expects to eventually move beyond the self-driving version of the Chevrolet Bolt electric vehicle and start using the Origin purpose-built self-driving shuttle. The company believes profit margins could ultimately be about 40%, GM said in October.

Cruise has managed to stay on track despite major change in the past year. Former Chief Executive Officer Dan Ammann was dismissed last year after disagreeing with GM CEO Mary Barra on whether Cruise should be spun off in an initial public offering. 

Kyle Vogt, the company's founder, took over as CEO, vowing to focus on getting the robotaxi business going.

After that, SoftBank Vision Fund sold its stake in Cruise to GM for $2.1 billion, giving the automaker 80% ownership. That ended SoftBank's relationship with Cruise and tightened GM's control over the company.