GM’s Cruise offers $75,000 settlement to California regulators

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General Motors’ self-driving car unit Cruise is offering to pay $75,000 to resolve an investigation by California state regulators into Cruise’s failure to disclose details of an Oct. 2 accident in San Francisco involving a Cruise robotaxi and a pedestrian.

According to a December filing with the California Public Utilities Commission (CPUC) given to the Detroit Free Press by Cruise, the company promises to voluntarily make several “new data reporting enhancements” to the commission.

The Free Press reported last month that an administrative law judge ordered Cruise to appear at a Feb. 6 hearing to explain why it it should not be fined for “misleading” California regulators about the October accident in which a robotaxi struck and dragged a pedestrian 20 feet leaving her critically injured.

Cruise Automation self-driving test vehicle navigates the urban streets of San Francisco, CA.

This recent filing said Cruise has hired law firm Quinn Emanuel to examine Cruise’s response to the incident, including Cruise’s interactions with regulators, law enforcement, and the media. The investigation’s findings will be complete and made public before Feb. 6, the filing said. The settlement offers were first reported by Reuters.

In the 14-page filing, Cruise requested the Feb. 6 hearing be deferred and the matter settled with Cruise’s $75,000 cash offering along with its promise to improve its data reporting to the commission of collisions, as well as of incidents where the self-driving cars are a minimum risk, but must be physically retrieved from roadways.

“Cruise is committed to rebuilding trust with our regulators, increased transparency and cooperation with the CPUC, and providing the data and information the Commission needs to ensure that AV service is safe, equitable and accessible,” Cruise spokesman Erik Moser told the Free Press in an email in response to Cruise filing the settlement offer with CPUC.

Accusations of misleading investigators

The filing is a response to an administrative law judge’s ruling in December said that a Cruise senior manager called the CPUC on Oct. 3 to report the pedestrian accident. But the manager’s description of the incident said the Cruise vehicle immediately stopped upon impact with the pedestrian, omitting the critical information about a pullover maneuver the car made that resulted in the pedestrian being dragged.

That omission, “misled the Commission regarding the extent and severity of the October 2, 2023 incident, as well as the ability of Cruise’s AV’s to operate safely after experiencing a collision,” the December ruling stated.

In a Freedom of Information Act request filed by the Free Press in October, documents from the California Department of Motor Vehicles show that on Oct. 3 the DMV was shown a video, provided by Cruise, from onboard vehicle cameras of the incident. The video ended at the hard stop when the pedestrian was struck. The department learned of the later movement by the vehicle from another government agency, the document said. It then requested the full video from Cruise, which it got on Oct. 13.

The fallout

The fallout from that Oct. 2 accident resulted in regulators suspending Cruise from further operations in San Francisco in late October.

That was followed by Cruise opting to suspend all its operations nationwide. Cruise has since fired nine executives and cut about 24% or 900 full-time employees from its workforce last month. Cruise CEO Kyle Vogt and of co-founder and Chief Product Officer Dan Kan have resigned, and GM CEO Mary Barra said in November that GM will be making “substantially lower spending” in Cruise in 2024 than it did in 2023. Though GM still supports Cruise’s mission.

In the third quarter, GM reported that Cruise cost it $732 million compared with a year ago when GM spent $497 million. GM has invested about $2 billion a year in Cruise since 2016 and has not seen any profits yet.

Late last month, Reuters and others reported that GM is suing San Francisco for a total of $121 million in back taxes. The lawsuit alleges the city overcharged GM by more than $100 million over seven years by miscalculating Cruise’s tax bill. GM said Cruise is run separately from GM, so taxes should be based on Cruise’s payroll not GM’s. GM wants a refund of about $108 million in taxes plus $13 million in interest and penalties between 2016 and 2022.

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