Unease spreads in China about super cheap robot taxis

In China, it is possible to travel 6 miles in a taxi without a driver for only 50 cents.

In Wuhan, a vast metropolis with a population exceeding 11 million people in central China, where Covid 19 first occurred in 2020, autonomous vehicles commonly called robot taxis are popular at exceptional prices. Wuhan has ambitions to become the world's first driverless city, yet cars often struggle to drive on the road.

“In a video that has been viewed over 80 million times on Chinese social media Weibo (Weibo) since last week, a passenger in one of the white robot taxis and sedans said.

The 500 vehicles operating in the city belong to Apollo Go, which is under the umbrella of the Chinese high-tech giant Baidu (BIDU). According to the release announced by the company in May, the service is provided in an area covering about half of the population of Wuhan.

The big selling point is price. The national media “Global Times” reported on Wednesday that the basic fare starts at 4 yuan (55 cents), which is cheaper than 18 yuan (2.48 dollars) for taxis driven by humans.

The service started in 2022, and began gaining popularity in the first half of this year. The company aims to double its fleet to 1000 cars by the end of 2024. According to the Wuhan Municipal Transportation Bureau, there are currently about 17,000 taxis running in the city of Wuhan.

However, Chinese gig economy workers are upset because of the rapid spread of taxis without drivers. After years of strict coronavirus regulations and the real estate crisis, deflation accompanies the economy and is suffering from sluggish wages.

“Mr. Tu Le, the managing director of Sino Auto Insights, answered an email interview on CNN. He added that significant job losses could be years away.

The gross domestic product (GDP) from April to June, announced by the National Bureau of Statistics on Monday, was only up 4.7%, which was far below the 5.1% increase expected.

Also, complaints about traffic congestion due to unmanned vehicles not responding to traffic signals have been received from Wuhan residents. Earlier this month, the national newspaper “People's Daily” reported that a robot taxi ignored a red light and collided with a pedestrian.

The backlash against this service, particularly against Apollo Go's alleged predatory pricing tactics, became the second trending topic on the Chinese microblogging site Weibo last week, and over 75 million users participated in the discussion.

“Disrupting the market is not their cause for concern. They'll steal your rice bowl,” one user wrote, pointing to the ability to earn a living.

“Driving schools, road inspectors, and taxis will all be closed,” another user said.

An Apollo Go spokesperson objected to this expression. In response to the CNN interview, this spokesperson stated that discounts and subsidies from local governments are often used at the beginning of the service in order to have the service tested. He added that extremely low pricing is a temporary strategy.

Autonomous taxis are currently operated on a relatively small scale in several cities around the world, mainly in the United States and China.

Multiple American companies, such as Waymo (Waymo), a subsidiary of Alphabet (GOOG), which is the parent company of Google, and Cruise (Cruise), a subsidiary of GM (GM), are working on autonomous rideshare services, but recently they have faced a standstill.

Cruise, which was testing a fully autonomous vehicle in California, had a series of collision accidents, such as being dragged on asphalt and a woman being seriously injured, and permission was suspended in 2023/10. The company is currently being investigated by the Department of Justice.

Waymo recently had to announce a recall when two cars crashed into the same tow truck within minutes.

Uncertainties surrounding the safety and reliability of driverless cars have cast a long shadow on this industry in the US. However, Tesla (TSLA) CEO Elon Musk doesn't care, and the electric car giant has declared that it will announce robot taxis within a few months.

According to a 2023 report by consulting firm McKinsey, there is a possibility that China, which already has the world's largest automobile market, will one day become the top market for autonomous vehicles.

McKinsey predicts that this sector has the potential to generate revenue of 300 billion dollars to 400 billion dollars by 2035.

In several major Chinese cities, including Wuhan and Shenzhen, the government has granted commercial licenses to companies that test driverless services, and automobile manufacturers and ride-hailing platforms are also investing in autonomous vehicles.

According to state-run media China Daily, last week, Shanghai's Pudong New Area Authority began issuing licenses to driverless car operators, including Apollo GO and AutoX supported by Alibaba. Pony.ai, a Californian startup supported by Toyota and Saudi Arabia, has also given the go-ahead to test driverless cars in financial centers.

A Beijing government official said in June that they are “seeking public opinion” on regulations that use autonomous vehicles for buses, taxis, and rental car services.

Earlier this month, the Beijing Economic and Information Technology Bureau announced draft guidelines stating that autonomous vehicles should be equipped with drivers or safety personnel, so that they can be interfered with by remote control. If there is a traffic violation, it is necessary to deal with it based on local laws and regulations.

According to the People's Daily, in Shenzhen, which is a huge city in the south, Apollo Go obtained a license to conduct test runs in Bao'an District in February, and charging became possible. Such attempts are expected to increase further across the country.