Super Cheap Robotaxi Rides Spark Anxiety Across China

In China, traveling six miles in a driverless taxi costs just around 50 cents. These self-driving cars, known as robotaxis, are being introduced at extremely competitive prices in Wuhan, a vast city with over 11 million residents in central China. The city aims to become the world’s first fully driverless urban area, despite current challenges the vehicles face navigating its streets.

“You’ll never have to buy a car,” said a passenger in one of the white robotaxis in a video that has garnered over 80 million views on Weibo, a popular Chinese social media platform.

The fleet of 500 vehicles, operated by Apollo Go, a division of Chinese tech giant Baidu (BIDU), serves an area covering roughly half of Wuhan’s population, according to a company release in May.

The low fares are a significant draw. Base fares start at 4 yuan (55 cents), significantly cheaper than the 18 yuan ($2.48) for a human-driven taxi, as reported by state media Global Times.

Launched in 2022, the service gained traction during the first half of the year. Apollo Go plans to double its fleet to 1,000 cars by the end of 2024. Wuhan currently has about 17,000 traditional taxis, according to the city’s transport bureau.

However, the rapid expansion of driverless taxis has unsettled China’s gig economy workforce, which has already been hit by stagnant wages due to deflationary pressures and a real estate crisis following years of strict coronavirus restrictions.

“With the Chinese economy facing challenges, people are likely more anxious about job security, and this highlights one potential threat,” said Tu Le, managing director of Sino Auto Insights, in an email to CNN. He added that significant job losses might not occur for a few years.

On Monday, the National Bureau of Statistics reported that China’s GDP grew by only 4.7% from April to June, below the expected 5.1%.

There have also been complaints from Wuhan residents about traffic issues, with driverless cars sometimes failing to respond to traffic signals. Earlier this month, one robotaxi ran a red light and hit a pedestrian, according to state-run People’s Daily.

 

Economic and Social Impact

Backlash against the service, particularly Apollo Go’s pricing strategies, became a hot topic on Chinese social media, with over 75 million users discussing it on Weibo.

“Disrupting the market is the least of their concerns. They will take away our livelihoods,” commented one user.

“Driving schools, road inspectors, and taxis will all shut down,” warned another.

A source within the company explained to CNN that discounts and subsidies from local governments are typical during the initial launch phase to encourage people to try new services, suggesting that the “extremely low” pricing might be temporary.

 

Global Perspective

Autonomous taxis currently operate on a small scale in several cities worldwide, predominantly in the United States and China, with the UAE also hosting trials for driverless vehicles.

In the US, companies like Waymo, a subsidiary of Alphabet (GOOG), and GM’s Cruise are developing autonomous ride-sharing services but have faced recent setbacks. Cruise’s testing permit in California was suspended in October 2023 after several collisions, including a serious incident. Waymo also had to recall cars following accidents involving tow trucks.

Safety and reliability concerns have cast a shadow over the US driverless car industry. However, Tesla CEO Elon Musk remains optimistic, promising to unveil a robotaxi soon.

 

China’s Path to Autonomous Dominance

China, the world’s largest car market, could also become the top market for automated vehicles, according to a 2023 McKinsey report, which projects the sector could generate $300 billion to $400 billion in revenue by 2035, partly due to strong support from Beijing for pilot programs.

Several major Chinese cities, including Wuhan and Shenzhen, have issued commercial licenses for driverless services, with automakers and ride-hailing platforms investing heavily in automated fleets.

Last week, authorities in Shanghai’s Pudong New Area began issuing licenses to driverless car operators, including Apollo Go and Alibaba-backed AutoX, according to China Daily. California-based Pony.ai, supported by Toyota and Saudi Arabia, also received approval to test driverless vehicles in the financial hub.

In June, Beijing officials sought public input on regulations for autonomous buses, taxis, and car rentals. The Beijing Municipal Bureau of Economy and Information Technology recently issued draft guidelines requiring autonomous vehicles to have onboard drivers or remote safety officers, and stated that traffic violations should be managed according to local laws.

In Shenzhen, Apollo Go received a license in February to conduct a trial in the Bao’an district, allowing the company to charge for rides. More trials are expected across the country, indicating a significant shift towards autonomous transportation in China.