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In 2023, it almost felt as if the promise of robotaxis was soon to be fulfilled. Hailing a robotaxi had briefly become the new trendy thing to do in San Francisco, as simple and everyday as ordering a delivery via app. However, that dream crashed and burned in October, when a serious accident in downtown San Francisco involving a vehicle belonging to Cruise, one of the leading US robotaxi companies, ignited distrust, casting a long shadow over the technology’s future. 

Following that and another accident, the state of California suspended Cruise’s operations there indefinitely, and the National Highway Traffic Safety Administration launched an investigation of the company. Since then, Cruise has pulled all its vehicles from the road and laid off 24% of its workforce.

Despite that, other robotaxi companies are still forging ahead. In half a dozen cities in the US and China, fleets of robotaxis run by companies such as Waymo and Baidu are still serving anyone who would like to try them. Regulators in places like San Francisco, Phoenix, Beijing, and Shanghai now allow these vehicles to drive without human safety operators. 

However, other perils loom. Robotaxi companies need to make a return on the vast sums that have been invested into getting them up and running. Until robotaxis become cheaper, they can’t meaningfully compete with conventional taxis and Uber. Yet at the same time, if companies try to increase adoption too fast, they risk following in Cruise’s footsteps. Waymo, another major robotaxi operator, has been going more slowly and cautiously. But no one is immune to accidents. 

“If they have an accident, it’s going to be big news, and it will hurt everyone,” says Missy Cummings, a professor and director of the Mason Autonomy and Robotics Center at George Mason University. “That’s the big lesson of this year. The whole industry is on thin ice.”

MIT Technology Review talked to experts about how to understand the challenges facing the robotaxi industry. Here’s how they expect it to change in 2024.

Money, money, money

After years of testing robotaxis on the road, companies have demonstrated that a version of the autonomous driving technology is ready today, though with some heavy asterisks. They operate only within strict, pre-set geographical boundaries; while some cars no longer have a human operator in the driver’s seat, they still require remote operators to take control in case of emergencies; and they are limited to warmer climates, because snow can be challenging for the cars’ cameras and sensors. 

“From what has been disclosed publicly, these systems still rely on some remote human supervision to operate safely. This is why I am calling them automated rather than autonomous,” says Ramanarayan Vasudevan, an associate professor of robotics and mechanical engineering at the University of Michigan.

The problem is that this version of automated driving is much more costly than traditional taxis. A robotaxi ride can be “several orders of magnitude more expensive than what it costs other taxi companies,” he says. “Unfortunately I don’t think the technology will dramatically change in the coming year to really drive down that cost.”

That higher ticket price will inevitably suppress demand. If robotaxis want to keep customers—not just those curious to try it out for the first time—they need to make the service cheaper than other forms of transportation. 

Bryant Walker Smith, an associate professor of law at the University of South Carolina, echoes this concern. “These companies are competing with an Uber driver who, in any estimate, makes less than minimum wage, has a midpriced car, and probably maintains it themselves,” he says. 

By way of contrast, robotaxis are expensive vehicles packed full of cameras, sensors, and advanced software systems, and they require constant monitoring and help from humans. It’s almost impossible for them to compete with ride-sharing services yet, at least until a lot more robotaxis can hit the road.

And as robotaxi companies keep burning the cash from investors, concerns are growing that they are not getting enough in return for their vast expenditure, says Smith. That means even more pressure to produce results, while balancing the potential revenues and costs. 

The resistance to scaling up

In the US, there are currently four cities where people can take a robotaxi: San Francisco, Phoenix, Los Angeles, and Las Vegas. 

The terms differ by city. Some require you to sign up for a waitlist first, which could take months to clear, while others only operate the vehicles in a small area.

Expanding robotaxi services into a new city involves a huge upfront effort and cost: the new area has to be thoroughly mapped (and that map has to be kept up to date), and the operator has to buy more autonomous vehicles to keep up with demand. 

Also, cars whose autonomous systems are geared toward, say, San Francisco have a limited ability to adapt to Austin, says Cummings, who’s researching how to measure this type of adaptability. “If I’m looking at that as a basic research question, it probably means the companies haven’t learned something important yet,” she says. 

These factors have combined to cause renewed concern about robotaxis’ profitability. Even after Cruise removed its vehicles from the road, Waymo, the other major robotaxi company in the US, hasn’t jumped in to fill the vacuum. Since each robotaxi ride currently costs the company more money than it makes, there’s hardly an appetite for endless expansion.

Worldwide development

It’s not just the US where robotaxis are being researched, tested, and even deployed. 

China is the other leader right now, and it is proceeding on roughly the same timeline as the US. In 2023, a few cities in China, including Beijing and Shanghai, received government clearance to run robotaxies on the road without any safety operators. However, the cars can only run in certain small and relatively remote areas of the cities, making the service tricky to access for most people.

The Middle East is also quickly gaining a foothold in the sector, with the help of Chinese and American companies. Saudi Arabia invested $100 million in the Chinese robotaxi startup Pony.AI to bring its cars to Neom, a futuristic city it’s constructing that will supposedly be built with all the latest technologies. Meanwhile, Dubai and Abu Dhabi are competing with each other to become the first city in the Middle East to pilot driverless vehicles on the road, with vehicles made by Cruise and the Chinese company WeRide.

Chinese robotaxi companies face the same central challenge as their US peers: proving their profitability. A push to monetize permeated the Chinese industry in 2023 and launched a new trend: Chinese self-driving companies are now racing to sell their autopilot systems to other companies. This lets them make some quick cash by repackaging their technologies into less advanced but more in-demand services, like urban autopilot systems that can be sold to carmakers.

Meanwhile, robotaxi development in Europe has lagged behind, partly because countries there prefer deploying autonomous vehicles in mass transit. While Germany, the UK, and France have seen robotaxis running road tests, commercial operations remain a distant hope. 

Lessons from Cruise’s fiasco

Cruise’s dreadful experience points to one major remaining roadblock for robotaxis: they still sometimes behave erratically. When a human driver (in a non-autonomous vehicle) hit a pedestrian in San Francisco in October and drove away from the scene, a passing Cruise car then ran over the victim and dragged her 20 feet before stopping. 

“We are deeply concerned that more people will be killed, more first responders will be obstructed, more sudden stops will happen,” says Cathy Chase, president of Advocates for Highway and Auto Safety, an activist group based in Washington, DC. “We are not against autonomous vehicles. We are concerned about the unsafe deployment and a rush to the market at the expense of the traveling public.”

These companies are simply not reporting enough data to show us how safe their vehicles are, she says. While they are required to submit data to the National Highway Traffic Safety Administration, the data is heavily redacted in the name of protecting trade secrets before it’s released to the public. Some federal bills proposed in the last year, which haven’t passed, could even lighten these reporting requirements, Chase says.

“If there’s a silver lining in this accident, it’s that people were forced to reckon with the fact that these operations are not simple and not that straightforward,” Cummings says. It will likely cause the industry to rely more on remote human operators, something that could have changed the Cruise vehicle’s response in the October accident. But introducing more humans will further tip the balance away from profitability.

Meanwhile, Cruise was accused by the California Public Utilities Commission of misleading the public and regulators about its involvement in the incident. “If we cannot trust these companies, then they have no businesses on our roads,” says Smith. 

A Cruise spokesperson told MIT Technology Review the company has no updates to share currently but pointed to a blog post from November saying it had hired third-party law firms and technology consultants to review the accident and Cruise’s responses to the regulators. In a settlement proposal to CPUC, Cruise also offered to share more data, including “collision reporting as well as regular reports detailing incidents involving stopped AVs.”

The future of Cruise remains unclear, and so does the company’s original plan to launch operations in several more cities soon. Meanwhile, though, Waymo is applying to expand its services in Los Angeles while taking its vehicles to the highways of Phoenix. Zoox, an autonomous-driving startup owned by Amazon, could launch commercial service in Las Vegas this year. For residents of these cities, more and more robotaxis may be on the road in 2024.

Correction: The story has been updated to clarify that Cruise’s October 2 accident was not fatal. The victim was hospitalized with serious injuries but survived.