General Motors, which owns Cruise, says the recall comes after a crash that involved a cruise car dragging a pedestrian in San Francisco in October.
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Cruise is now taking steps to get its robotaxis back on the road, after California's DMV forced the company to pause driverless rides in October.
The company said in documents posted by U.S. safety regulators on Wednesday that with the updated software, Cruise vehicles will remain stationary should a similar incident occur in the future.
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"I would say that cruise has lost all public trust and they need to start over again," Aaron Peskin, President of the San Francisco Board of Supervisors said.
This recall happens just five weeks after a person was first thrown in front of a cruise vehicle during a hit-and-run crash and dragged 20 feet by the driverless vehicle as it attempted to move out of traffic.
The Oct. 2 crash prompted Cruise to suspend driverless operations nationwide after California regulators found that its cars posed a danger to public safety. The state's Department of Motor Vehicles revoked the license for Cruise, which was transporting passengers without human drivers throughout San Francisco.
In the crash, another vehicle with a person behind the wheel struck a pedestrian, sending the person into the path of a Cruise autonomous vehicle. The Cruise initially stopped but still hit the person. But it then pulled to the right to get out of traffic, pulling the person about 20 feet (six meters) forward. The pedestrian was pinned under one of the Cruise vehicle's tires and was critically injured.
VIDEO: Expert explains what's next for Cruise as CA DMV suspends driverless car permits
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In a statement Wednesday morning, Cruise said:
"The voluntary software recall addresses circumstances in which the Cruise Collision Detection Subsystem may cause the Cruise AV to attempt to pull over out of traffic instead of remaining stationary when a pullover is not the desired post-collision response."
Peskin says it's a little late for that.
"This just means that this product is absolutely not ready and state and federal regulators have not done their job to get in front of this. And, meanwhile, you have Cruise going, 'These things don't drive drunk.' It doesn't matter if they don't drive decently," he said.
A computer science assistant professor at Cal State East Bay says this recall means fixing code, just like an iPhone update.
Except this code tells the cars how to behave without a driver, and they're trained based on the data from previous experiences.
RELATED: CA DMV suspends Cruise driverless car permits amid public safety concerns
"We would need to see that this kind of AI system -- that works based on the experience -- is similar to the way a human behaves. The more experience a person has, the more, the better a person can react to the new scenarios," said Moayed Daneshyari.
NHTSA opened an investigation on Oct. 16 into four reports that Cruise vehicles may not exercise proper caution around pedestrians. Agency documents cited two injuries, including the Oct. 2 crash. The complaints involved vehicles operating autonomously and "encroaching on pedestrians present in or entering roadways, including pedestrian crosswalks in the proximity of the intended travel path of the vehicles," the agency said.
In documents filed with NHTSA, Cruise said its automated driving system was designed in some cases to pull over and out of traffic to minimize safety risks and disruption after a crash, with the response dependent on the characteristics of the crash. But in certain circumstances such as a pedestrian positioned on the ground in the vehicle's path, pulling over is not the desired response.
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The Cruise system "inaccurately characterized the collision as a lateral collision and commanded the AV to attempt to pull over out of traffic, pulling the individual forward rather than remaining stationary," the company said.
RELATED: Woman injured after being struck by SF hit-and-run driver, trapped under autonomous car, Cruise says
While the Department of Motor Vehicles didn't elaborate on specific reasons for its suspension of Cruise's license, the agency accused Cruise of misrepresenting safety information about the autonomous technology in its vehicles. The revocation followed a series of incidents that heightened concerns about the hazards and inconveniences caused by Cruise's robotaxis.
The DMV and others have accused Cruise of not initially sharing all video footage of the accident, but the robotaxi operator pushed back - saying it disclosed the full video to state and federal officials.
General Motors Co., has ambitious goals for Cruise. The Detroit automaker had been expecting annual revenue of $1 billion from Cruise by 2025 - a big jump from the $106 million in revenue last year.
GM recently paused production of the Origin, a fully autonomous vehicle designed for Cruise to carry multiple passengers. The company is expected to resume production at a Detroit-area factory once Cruise resumes autonomous ride-hailing.
Cruise says in addition to the recall, it's also establishing a Chief Safety Officer position to report directly to the CEO, appointing a third party engineering firm to conduct technical root cause analysis, retaining an outside law firm to review the company's response to the Oct. 2 incident. It also said it will be adopting company-wide pillars, focused on safety, transparency and community engagement.
The Associated Press contributed to this report.