David Welch, Detroit Bureau Chief, Bloomberg joined Grayson Brulte on The Road to Autonomy podcast to discuss the future of Cruise and how the robo-taxi market will shakeout. What moves will Waymo, Zoox and Motional make now that Cruise has been sidelined for the foreseeable future?

The conversation begins with David discussing how GM moves forward with Cruise after an October 2, 2023 incident involving a pedestrian in San Fransisco was allegedly mired in a coverup. The supposed actions led to the grounding of the Cruise fleet, the resignation of Co-Founder & CEO Kyle Vogt and a 24% reduction in the workforce including nine key executives. 

They are going to start-off in one city, so they are sort of stepping back 18 months. In terms of their roll-out, you know it does raise a big question if they even really push robo-taxi, or does this at some point does this become part of General Motors developing self-driving personally owned autonomous vehicles. – David Welch

On the news of the 24% reduction in the workforce at Cruise, GM’s stock rallied 6.65% to close at $36.08 on December 14, 2023. If Cruise is indeed absorbed by GM, the questions become what division will Cruise become part of, will there be a big pivot away from robo-taxis to personally owned autonomous vehicles and how will GM retain and hire new AI talent?

Or could GM shift the Cruise model to that of a licensing model? A model where GM licenses Cruise’s autonomous driving technology to other OEMs? This model could resonate with Wall Street as there would be a clear path to Cruise becoming a self-sustaining business unit of GM with high-margins. 

I think that could eventually be the real race or battle between Cruise and Waymo, licensing this technology to the car companies. – David Welch

Licensing will be one of the core elements of autonomous driving technology in the future. Today autonomous vehicles are a luxury product, not a mass market product. With autonomous vehicles being a luxury product, there is an opportunity to build a commerce layer into the rider experience. Could Alphabet look to possibly integrate YouTube into the Waymo as a monitizable experience?

With Cruise currently sidelined, could Waymo look to take advantage of the market conditions and accelerate the roll-out of the Waymo One program? Potentially, but Waymo appears to be sticking to their well managed roll-out that includes ride-hailing tours and an early rider program. 

Then there is Zoox, an Amazon company. When do they make their move? Zoox has been very quiet as the autonomous vehicle market accelerated and then contracted over the last year. Is now the time that Zoox takes advantage of the market conditions and introduces a paid robo-taxi service that could be added at a later date? Or is Amazon working on a Prime-Mobility tier?

Wrapping up the conversation, David shares his insights and thoughts on how he sees the robo-taxi market evolving over the next five years. 

The thing that is really going to have to change and evolve is what the business model is. – David Welch

Recorded on Tuesday, December 19, 2023

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