"Better late than never. I mean, it really begs the question, which is why they were not listening to the San Francisco Fire Department, the San Francisco Municipal Transportation Agency that have been saying for a long time that Cruise vehicles are not safe," said San Francisco Supervisor Aaron Peskin.
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MORE: Woman injured after being struck by SF hit-and-run driver, trapped under autonomous car, Cruise says
The DMV's decision comes after a high-profile accident earlier this month in San Francisco.
A woman was run over by a self-driving Cruise car on Market Street -- after she had been hit by a human driver right before.
ABC7 News spoke one-on-one with an eyewitness the moment it happened.
In our exclusive interview, he described what he saw.
EXCLUSIVE: Witness describes saving woman trapped under Cruise car after being hit by another driver
EXCLUSIVE: Witness describes saving woman trapped under Cruise car
"I stooped down, and I started asking the person, hello, hello are you OK? And then the person started moaning. As you can see there's still blood here," said Lee Goins.
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So the question now is, what happens to Cruise and will it also have an impact on other AV companies here in the Bay Area?
"If an autonomous car company can succeed in San Francisco, no other city will be difficult for them," said SJSU professor and tech expert Ahmed Banafa.
Banafa says while other states like Arizona and Nevada also operate driverless cars, San Francisco remains the global hub. He and others like Scott Moura of UC Berkeley believe despite this setback, that will continue to be true.
VIDEO: Driverless Cruise car struck by SF firetruck, injuring passenger, company says
They point to the fact that other places like Phoenix have had similar accidents happen in recent years.
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"You see this interaction happening in California. It's not happening in other states. And this is a classic question of big tech versus the hand of government and what is the right balance," said Moura.
While Cruise's permit might currently be suspended, Moura thinks they'll probably be able to win it back within a few months' time.
Until then though, Banafa says this process will ultimately make AVs safer for everyone in the long term.
"I'm sure that the other autonomous cars are looking at this and learning from that situation by saying let's add this one to our library of actions," said Banafa.