Ford and VW-backed self-driving company shuts down DC operations

By Matt McFarland, CNN Business

    (CNN) -- Argo AI, the self-driving company backed by Ford and Volkswagen, is shutting down its Washington, DC operation as part of a broader round of layoffs impacting about 150 people across the company.

Ford had planned to launch a robotaxi service in DC last year with Argo AI's technology, but the launch was delayed during the pandemic.

"We learned what we needed to through the in-market testing there and continue to test in Miami and Austin," Ford spokesperson Jennifer Flake said of DC. VW declined to comment.

Argo AI's workforce had grown to about 2,000 people from more than 1,000 in 2020.The layoffs were first reported by Automotive News. The closing of Argo AI's DC operation has not been previously reported.

Ford CEO Jim Farley had said on the company's latest earnings call this spring that self-driving technology is "expensive stuff," and that it was becoming more interested in using the tech for moving things like cargo.

Many of Argo AI's competitors, including Alphabet's Waymo and Toyota-backed Aurora, have already chosen to focus more on self-driving trucks, which industry experts say are much easier to build than robotaxis. The self-driving industry, including Argo AI, have learned that it's a tall order to teach a vehicle to safely navigate a bustling city, with construction sites, pedestrians, cyclists and emergency vehicles. Trucks, on the other hand, mostly stick to highways.

Farley also described access to capital as "very critical" as the automakers seek to fund Argo AI for "many years to come." Startups are finding it more challenging to raise funding this year amid inflation, rising interest rates, a declining stock market and faltering economy.

Argo AI was founded in 2016 and Ford became the majority stakeholder in 2017. VW invested in 2020. The automakers now own equal shares of the company.

Argo AI appears to be making significant progress toward a robotaxi service. In May, it announced it was offering self-driving rides without a human test driver behind the wheel to its employees in Austin and Miami. (Two of Argo AI's rivals, Waymo and GM's Cruise, operate robotaxis in Phoenix and San Francisco, respectively.)

"With incredible growth and progress made in our mission to deploy driverless vehicles, we are making prudent adjustments to our business plan to best continue on a path for success," Argo AI spokesman Alan Hall said in a statement.

DC's government allows testing of fully autonomous vehicles, but companies can not legally operate robotaxis in the city. Fordfirst announced in 2018 plans to test self-driving vehicles in the nation's capital. It planned for the DC robotaxi service to be its second market after Miami, where it was already testing.

Sherif Marakby, who was then CEO of Ford Autonomous Vehicles, said at the time that expanding to DC was "an enormous opportunity to understand how a comprehensive self-driving business could be utilized." Marakby left Ford in 2020, according to his LinkedIn profile.

The city will need to develop a policy to certify such a service, but that's not being created currently, according to German Vigil, a spokesperson for the District Department of Transportation.

Argo AI and Ford declined to say if regulations were a factor in the departure.

This story has been updated to clarify the relationship of Ford and Argo AI.

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