California's first autonomous public passenger pilot project may reshape industry landscape and market expectations

California is becoming the focus of the global autonomous vehicle (AV) field - GM's Cruise is about to launch the state's first pilot program for driverless passenger services open to the public. This project is not only about technology validation, but may also provide key market and operational data for the entire industry.

In June this year, the California Public Utilities Commission (CPUC) officiallyauthorizedCruise to conduct a pilot program, initially offering free rides to passengers. According to the permit, only autonomous vehicles with a capacity of less than 15 passengersare eligible to participate. Currently, more details have not been disclosed: Cruise has not responded to further requests for comment, and a CPUC spokesperson has also declined to reveal additional information.

This pilot program provides a unique opportunity for California and AV companies. The industry will closely watch the public's reaction to the service, and how Cruise and regulators define "success." If the project goes smoothly, it may encourage competitors to follow suit with driverless passenger services.

This new project builds on California's existingmature AV testing environment. At the end of last year, the state issued its first deployment permit to Nuro, allowing it to conduct paid driverless delivery services in two Bay Area counties. Given California's leading commitment to AV testing on public roads, experts are not surprised by this pilot program and believe that cooperation with Cruise may accelerate the AV deployment process. However, industry insiders remind that the pilot program needs to set clear goals and quantitative indicators to achieve long-term success.

"In many ways, California leads the nation in embracing and promoting autonomous driving." Eric Tanenblatt, global chair of public policy and regulation at Dentons, said in an email. "What makes Cruise unique is that they have deliberately chosen to test in urban environments, addressing the various challenges posed by dense roads as early as possible. In fact, such environments are precisely where autonomous driving truly serves the public."

Data collection will be key

During the pilot program, CPUC requires Cruise to submit quarterly "vehicle operations" reports. Industry experts look forward to seeing what data the company collects and makes public, especially information beyond the existingdisengagement reports. Additional data may include encounters of AVs on public roads, and the frequency of public use.

Mark Rosekind, chief safety innovation officer at Cruise competitor Zoox (an Amazon subsidiary also testing AVs in California), pointed out that the aviation industry's practice of sharing data to improve industry safety could serve as a reference for the AV field. "I'm not saying share all proprietary data, but safety data," Rosekind said. "Tempe (the 2018Uber AVincident where a pedestrian was killed), I call it 'never again.' Once a similar accident happens, all data will be shared. You shouldn't let every company go through that kind of accident to learn how to respond. Once, and never again."

Although California already requires AV companies to publish disengagement reports (showing how often safety drivers take over the autonomous driving system), there are still voices wanting more information. Companies themselves also believe that disengagement reports are insufficient because they cannot deeply reflect the maturity of the technology's commercial deployment.

The industry may learn from Tesla - the company collects data in the real world throughvisual recognition camerasand analyzes scenarios faced by drivers. However, this approach has also sparked controversy, with experts concerned that drivers are not aware they are becoming "testers" of immature software. Jason Marks, head of AV business development at software company NI, believes that recording everything Cruise vehicles encounter on California streets (such as pedestrians, bicycles, cars, and other obstacles) could become an effective metric.

"In many ways, California leads the nation in embracing and promoting autonomous driving."

- Eric Tanenblatt, Global Chair of Public Policy and Regulation at Dentons

"Disengagement reports alone are not enough to make a true judgment on the success of the vehicles," Marks said. "I'm curious what they will eventually release. I think there are many very good metrics to choose from here... If that metric can have a certain level of granularity, it will greatly advance the industry."

Marks noted that one of the most revealing metrics Cruise should track is how often the public rides in its vehicles during the pilot program. Although the company cannot charge fees, public usage of the free AVs still needs to be monitored to drive positive public opinion.

"I'm not sure which metric applies here," Marks said. "But if we can convince the public that these vehicles are legal, safe, and a viable mode of transportation in the near term, then we can restart this wave of enthusiasm: 'We're back, and people are excited about AVs.'"

Is public sentiment shifting?

AVs remain a focus of public uncertainty, with pollsconsistently showingthat many people are unwilling to try them due to safety concerns, and past tests have repeatedly been mired in controversy. Some cities are attempting to bridge the gap with small-scale autonomous shuttle services, but there isstill a long way to go。

Meanwhile, CPUC officials said in a statement that the pilot program could serve as another way to build consumer confidence, especially since Cruise has obtained adriverless testing permitfrom the California Department of Motor Vehicles (DMV). Tanenblatt also noted that the CPUC program has strict safety standards for AVs.

Under the CPUC permit, vehicles must comply with state highway and vehicle standards, and Cruise must also submit a passenger safety plan and maintain up-to-date insurance. If commercial services are offered in the future, a separate deployment permit would be required, similar to the service Waymo operates inPhoenix.

The passenger safety plan includes multiple requirements, according to theCPUC decision approving the pilot. Among them, Cruise must detail how it will "minimize passenger safety risks," including preventing assault and harassment. The company must also explain how it will ensure passengers get in and out safely, and how it will educate the public. CPUC spokesperson Terrie Prosper said Cruise submitted the plan under a "confidentiality statement," so it will not be made public.

Zoox's Rosekind added that it is also important for regulators at CPUC and DMV to personally participate in pilot rides, as their public support can help build public trust. "Key people responsible for oversight or decision-making should get first-hand experience, and ideally not just with one company but with multiple companies, to understand the differences," he said. "This is a way to make up for the current inability to hail a ride with an app on the corner."

The National Highway Traffic Safety Administration (NHTSA)at the end of last monthissued an order that may help convince the public of the safety of AVs. The order requires manufacturers and vehicle operators to report crashes when using advanced driver assistance systems (ADAS) or autonomous driving systems.

Marks believes that driver shortages at ride-hailing services like Uber and Lyft may also increase public acceptance of AVs in California, as these companies arestrugglingto cope with passenger demand and seekingprofitability, leading to higher prices.

"I think if enough people think: 'I'm at the bar, I shouldn't drive home, I want to hail a ride, but Uber's surge pricing is $50.' If I could choose a driverless vehicle to take me home, that would be a very attractive way to get people to accept it," he said.

Progress before permanent service

Tanenblatt said Cruise's AV fleet in California could operate "almost like a public transit system," directly meeting passenger demand. But all AVsstill face technical and regulatory hurdlesin full adoption, so such widespread application may be "easier said than done."

Cruise has sought to lead AV development,in Maysaid its Origin model (pictured above) - the company's first vehicle designed without a driver - will go into production in 2023.

Rosekind, a former NHTSA administrator, noted that the driverless pilot is an opportunity for California, but without a national AV law, it may be difficult to replicate in other states. He warned that state AV laws would form a "patchwork." "This means there will be a lack of consistency," he said. "At the federal level, we have clear requirements for all vehicle safety. But people once worried about a state-level patchwork, and now we are in it. If you want to operate across states, there is no unified plan, rule, or policy."

For Cruise, the most revealing part of the pilot - beyond technological evolution - may be fleet utilization, which will help it determine pricing, as the company can measure public interest and calculate the price needed for profitability. Jeff Phillips, global director of transportation market strategy at NI, said this could be the most important lesson for the company and its competitors.

"They won't earn revenue from carrying passengers, but they can build a model to estimate what revenue might or would need to be, based on different utilization rates, to achieve positive capitalization," Phillips said. "Maybe that's what they ultimately want to learn: what does the price point have to be?"

But even so, the issue of payment for driverless vehicles will still exist, especially if the passenger service becomes a permanent project.

"We won't see AVs or entire driverless taxi fleets next year. No. If that's the goal, people will be disappointed."

- Mike Juran, CEO of Altia

"Imagine a ride-sharing service with more than one passenger in the car," said Andy Taylor, senior director of global strategy at transportation IT company Cubic Transportation Systems. "Who manages the passengers? Who provides additional safety? ... Would you stop the car to wait for an inspector? Is that fair to other passengers?"

GM CEO Mary Barra said in May during theQ1 earnings callthat her focus for Cruise is a "revolutionary and evolutionary strategy," includinggreater reliance on ADAS, and gradually increasing automation as cities expand.

Despite the promising prospects of the new pilot, Mike Juran, CEO of automotive software company Altia, reminded that managing expectations is crucial. "We won't see AVs or entire driverless taxi fleets next year," Juran said. "No. If that's the goal, people will be disappointed."