The California Department of Motor Vehicles (DMV) has taken swift action by suspending Cruise's permits for deploying and testing its self-driving vehicles. This decision, effective immediately, comes in response to mounting safety concerns and incidents that have arisen since Cruise, a subsidiary of General Motors, was granted permission in August to offer around-the-clock robotaxi services in San Francisco.

The California DMV explained its decision, pointing to four specific regulations that empower them to suspend permits when there is an "unreasonable risk to public safety." These regulations cover instances where the Department determines that the manufacturer's vehicles are not safe for public operation or if the manufacturer has misrepresented any safety-related information about its autonomous technology.

The decision was also grounded in a policy that considers any action or inaction by the manufacturer, its representatives, employees, contractors, or designees that could be deemed an unreasonable risk to the public during autonomous vehicle testing on public roads, according to the department's statement.

Cruise spokesperson Hannah Lindow stated in a CNBC interview, "We learned today at 10:30 am PT of the California DMV's suspension of our driverless permits." She added, "As a result, we will be pausing operations of our driverless AVs in San Francisco." Cruise confirmed its commitment to cooperating with the California DMV's investigation.

Last week, federal auto safety regulators initiated an investigation into Cruise following pedestrian injuries. The National Highway Traffic Safety Administration is leading this inquiry, prompted by multiple reports of pedestrian injuries related to Cruise vehicles in recent months, involving an estimated 594 self-driving Cruise vehicles, according to the filing.

Philip Koopman, an automotive safety researcher and associate professor of computer engineering at Carnegie Mellon University, explained that in any "life-critical system" that experiences a "severe mishap," a "safety stand-down" is essential, involving the suspension or reduction of operations. However, Koopman pointed out that Cruise has not voluntarily initiated such safety stand-downs in the past; the California DMV compelled them after a fire truck crash and now after a pedestrian accident.

Cruise's 24/7 robotaxi service was approved more than two months ago by California's Public Utilities Commission, allowing it to become the first major U.S. city to enable two robotaxi companies, Waymo (owned by Alphabet) and Cruise, to compete for service around the clock. This expansion permits these companies to adjust their fleets as needed and charge fares at any time of day.

However, just one day after receiving approval, up to 10 of Cruise's driverless vehicles caused a traffic jam in San Francisco. In response to the incident, the DMV requested that Cruise "immediately reduce its active fleet of operating vehicles by 50%" while an investigation was conducted. The DMV has now presented Cruise with a guide to applying for reinstated permits, but such an appeal will only be approved if Cruise meets the department's requirements to their satisfaction.

It's important to note that the DMV's decision does not affect Cruise's permit for testing with a safety driver. Cruise CEO Kyle Vogt stated on LinkedIn last week, "Safety is our top priority, and our passion is continuous improvement. As a result, our AVs continue to get better."