Uber taps GM's Cruise for autonomous ride-hailing launch in 2025

General Motors-backed Cruise has announced a partnership with ride-hailing giant Uber to offer robotaxi services beginning in 2025. This multi-year collaboration, revealed on Thursday, will enable Uber users to specifically request trips in Cruise's self-driving vehicles, potentially revolutionising urban transportation.

The news sparked immediate market reactions, with GM's shares climbing 1.3% in after-hours trading, while Uber experienced a slight dip of 1.5%. This partnership represents a strategic move for both companies, as they seek to capitalise on the growing demand for autonomous transportation solutions.

For Uber, this alliance marks a significant step in its autonomous vehicle strategy. The company, which divested its own self-driving division in 2020 to focus on its core businesses of ride-hailing and food delivery, has been actively pursuing partnerships in the AV sector. Uber CEO Dara Khosrowshahi recently emphasised the company's unique position to offer "tremendous value for AV players looking to deploy their technology at scale."

This isn't Uber's first foray into offering autonomous rides. The company has been providing driverless car services in Phoenix since October 2023 through a partnership with Alphabet's Waymo. That collaboration has seen considerable success, with Waymo operating about 700 uncrewed robotaxis that collect fares, currently the only such service in the United States.

For Cruise, this partnership represents a crucial opportunity for redemption and growth. The company is working to rebuild trust and resume operations following a major accident in San Francisco last year that led to a suspension of its services. In recent months, Cruise has restarted testing with safety drivers while engaging with state and federal officials to address safety concerns.

Addressing these safety issues head-on, Cruise agreed on Thursday to recall nearly 1,200 robotaxis due to hard braking problems, a move that led the U.S. auto safety regulator to close its investigation into the matter. This proactive step demonstrates Cruise's commitment to safety as it prepares for its collaboration with Uber.

The announcement comes at a time of intense competition and rapid development in the autonomous vehicle sector. Tesla CEO Elon Musk is set to unveil the company's long-delayed robotaxi plans in October, adding another major player to the mix. However, the industry continues to face significant challenges, including complex technology hurdles, substantial investment requirements, and stringent regulatory oversight.

Despite these obstacles, the autonomous vehicle market shows promising growth. Uber reported a six-fold increase in trips by self-driving vehicles on its platform in the second quarter of 2024 compared to the previous year. This growth has been driven by partnerships not only with companies like Waymo but also with startups such as Waabi for freight services.

The collaboration between Cruise and Uber represents a significant milestone in the commercialization of autonomous vehicles. It combines Cruise's advanced self-driving technology with Uber's vast user base and established ride-hailing infrastructure, potentially accelerating the adoption of autonomous transportation in urban areas.