GM-built electric Origin vehicles are to join Cruise’s fleet by 2023.
Cruise
Cruise, the autonomous driving company backed by General Motors, is moving toward the launch of commercial operations and hasn’t altered its business plans following the unexpected departure of former CEO Dan Ammann in December, says cofounder and interim CEO Kyle Vogt.
Vogt, who initially led Cruise for eight years after its creation in 2013 and is also CTO and president, was tapped to succeed Ammann. News reports suggested there was a disagreement between GM CEO Mary Barra and Ammann over IPO plans and GM President Mark Reuss said in a Dec. 17 CNBC interview that with Vogt in charge the automaker and the San Francisco tech company “totally align” on business plans.
Cruise Interim CEO Kyl Vogt is also its cofounder, CTO and president.
Cruise
“We have a great plan in place that goes out many years into the future,” Vogt tells Forbes in his first interview since the management shakeup. “We’ve got the full support of not just the Cruise board of directors, but also GM leadership and the GM board of directors to execute on that plan so we’re feeling pretty good about our position. Nothing about our mission or our objectives has changed at all. We’re just marching forward on that plan.”
Billions of investment dollars have flowed into driverless vehicle developers over the past five years, including Alphabet Inc.’s Waymo, Ford- and Volkswagen-backed Argo AI, Amazon’s Zoox and delivery-bot developer Nuro, as well as Cruise. Yet the timeline for broad commercialization of autonomous tech remains murky. Waymo generates revenue from autonomous ride and delivery services in suburban Phoenix, but hasn’t said when it expects to expand into other major cities. At the same time, robotic trucking and delivery services, such as those planned by TuSimple, as well as Waymo, Gatik, Aurora and Embark, are viewed as being on a somewhat faster path than robotaxis owing to a simpler operating environment–highways instead of crowded urban streets–and a need to make up for a long-haul trucker shortage.
Starting next year Cruise will add purpose-built, electric Origin vans supplied by GM to its fleet and thinks having them do double-duty throughout the day, acting as robotaxis during rush hour peaks and shifting to grocery and food deliveries when ride demand drops, will maximize revenue, Vogt says.
“With the rideshare demand there’s usually a morning rush and an evening rush. During those downtimes, late at night or in the middle of the day, we plan to have our Origins convert into something that can do deliveries,” Vogt said. “What that does is it makes the Cruise service overall have a much lower structural cost than anyone who’s doing just delivery or just ride share because you’re getting a higher utilization rate from the fleet.”
In November the company showed off a cargo module designed to quickly slide into the Origin’s cabin with eight insulated, individual lockers for grocery and food orders. “It can slide in and out in less than five minutes and convert a rideshare vehicle to a delivery vehicle,” Vogt said.
Cruise got approval from California last year to offer paid autonomous rides in parts of the San Francisco Bay region, where it’s based, and has been touting fully driverless runs in the city by Vogt and GM’s Barra. Those rides were in modified Chevrolet Bolt hatchbacks, Origin vans, which lack steering wheels, gas and brake pedals, join the fleet early next year. They’re designed to be relatively low-cost to build and keeping them on the road for as much of the day as possible is key to Cruise’s business model.
Cruise designed an insulated cargo module that quickly slots into an Origin van to carry groceries and food orders.
Cruise
“What’s going to make rideshare successful for us is things like pooled rides, where you get basically more revenue per mile, is really important,” Vogt said. “The Origin itself has a very low structural cost, it’s designed to last a million miles and we’ve done a lot of things to drop the operating cost on it beyond just lasting a really long time. The third thing is utilization rate. Not just how much you make per mile, but how many hours per day you can keep that vehicle moving.”
High utilization of the Cruise fleet was a key reason why it recruited Gil West, a former Delta Air Lines executive, to be its COO last year.
Nuro, for example, is readying autonomous vehicles to provide only delivery services, rather than passenger rides. Waymo splits rides and deliveries between Pacifica Hybrid vans in its Waymo One and Waymo Via services in Arizona, but that could evolve.
“While we’ve designed some of our Chrysler Pacificas in Phoenix to have Waymo Via branding and be designated for local deliveries, our overall strategy is to leverage a mixed fleet between Waymo One and Waymo Via local delivery,” the company said in an emailed statement. “We believe access to a larger pool of vehicles allows for better utilization across our fleet and between applications, which leads to increased efficiencies and improved economics for retailers and end customers.”
Separately, Vogt declined to discuss the possibility that a Cruise IPO could still happen, but was grateful for his years working with Ammann as the company focuses on shifting to commercial operations.
“I learned a lot from Dan when he was CEO,” he said. “He has a lot of deep automotive and financial experience, which really helped and I think put me in a good position to be able to run the company now, in the interim.”