Picture: Cruise

GM’s self-driving technology unit Cruise will launch commercial robotaxi services in Austin, Texas and Phoenix which are two hot spots for autonomous vehicle development. 

The services will initially be small scale, but from the first set of robotaxi services will be driverless, a term that means a human safety operator will not be behind the wheel. Operations will scale next year. Initial rides may be free with the plan to begin charging for the service shortly after. 

“In Phoenix we’re building off the partnership we have with Walmart, which is an investor and partner in Cruise,” said Kyle Vogt, Cruise CEO and Co-Founder referring to Cruise’s delivery pilot with the retail giant in Arizona.  

“And as of a few weeks ago, actually a few days ago, we got all the permits necessary for commercial ride-hail and delivery operations in Phoenix. So that business is really getting going.” 

Cruise has already had experience driving around the streets of Phoenix; however, they will be coming to Austin without any experience in the city.  

Cruise doesn’t have infrastructure or operations in Austin and has not mapped the city, Vogt said. 

Cruise is betting that its work in San Francisco, where it has a robotaxi service that operates in certain areas of the city between 10 p.m. and 5:30 a.m., will allow it to expand to new cities more quickly. 

The decision to launch in Phoenix and Austin this year is said to pull the company’s scaling schedule forward by six months. It also puts cruise in two cities that already have a great AV presence.  

“Looking at 2023, next year, things get really interesting on the growth side,” said Vogt. 

“There’s gonna be thousands of AVs rolling out of the General Motors plant, including the first Origins.We’ll be using those to light up many more markets and to start to generate meaningful revenue in those markets.” 

By 2025, Cruise expects to hit $1 billion in annual revenue, according to Vogt. The company closed out the second quarter of 2022 with $25 million after launching its commercial service in San Francisco. The company’s expenses increased $550 million, up from $332 million in the same quarter of last year, and its operating expenses almost doubled at $605 million. 

The increased spending is expected to continue as the company builds vehicles and expands into new markets.