China's Apollo Go sparks debate on low-cost robotaxi service and job impact

In China, the future of transportation is already a reality, with driverless taxis offering a 10-kilometer ride for just around Rs 40.

In Wuhan, a sprawling metropolis of over 11 million residents and the epicenter of the first Covid-19 outbreak in 2020, self-driving cars, or robotaxis, are gaining popularity as an affordable transportation choice. Despite the complexities of its urban landscape, Wuhan is striving to become the world’s first fully autonomous city, according to the CNN.

A recent video featuring a passenger in one of the white robotaxi sedans, which has amassed over 80 million views on Weibo, captures the excitement: “You’ll never have to buy a car.”

Apollo Go, a subsidiary of the Chinese tech giant Baidu (BIDU), operates a fleet of 500 robotaxis in Wuhan, covering roughly half the city’s population, according to a company statement in May. The standout feature of this service is its affordability, with base fares starting at just 4 yuan (Rs 46), significantly lower than the 18 yuan (Rs 207) for a traditional taxi, according to state media Global Times.

Launched in 2022, Apollo Go’s service has gained momentum and plans to double its fleet to 1,000 cars by the end of 2024. Wuhan, which currently has approximately 17,000 conventional taxis, is witnessing a rapid shift in its transport landscape.

Driverless taxis stir concerns

However, the rise of driverless taxis has sparked concerns among China’s gig economy workers, who are already facing stagnant wages amid deflation and economic challenges following years of stringent coronavirus restrictions and a real estate crisis. Tu Le, managing director of Sino Auto Insights, highlighted these fears, noting that significant job losses could be a few years away.

Recent economic data reveals that China’s gross domestic product (GDP) grew by just 4.7 per cent in the April to June period, below the expected 5.1 per cent. In Wuhan, there have been complaints about traffic congestion and incidents involving driverless cars, including a recent crash involving a robotaxi running a red light, as reported by People’s Daily.

Debate over Apollo Go pricing

The affordability of Apollo Go’s service has stirred debate on Weibo, with backlash emerging over alleged predatory pricing tactics. The topic became the second top trending discussion last week, with over 75 million users expressing concerns about the potential impact on jobs and traditional taxi services.

An Apollo Go spokesperson addressed these concerns, clarifying that the ‘extremely low’ pricing is part of an introductory strategy supported by local government subsidies to encourage adoption. The pricing is expected to normalise after the initial phase.

Autonomous taxis: Global picture

Globally, autonomous taxis are operating on a relatively small scale, with notable trials in the US and China, and recent initiatives in the United Arab Emirates. In the US, companies like Waymo, a subsidiary of Alphabet (GOOG), and GM subsidiary Cruise are developing autonomous ride-sharing services but have faced challenges, including regulatory scrutiny and safety incidents.

China, already the largest car market globally, is poised to lead in the autonomous vehicle sector. A 2023 McKinsey report projects that the sector could generate between $300 billion and $400 billion by 2035, bolstered by Beijing’s support for pilot programmes.

Chinese cities grant driverless licenses

Major Chinese cities, including Wuhan and Shenzhen, are granting commercial licences for driverless services. Recently, Shanghai’s Pudong New Area began issuing licences to driverless car operators, including Apollo Go and Alibaba-backed AutoX. Beijing is also soliciting public opinion on regulations for autonomous vehicles used in various services, with draft guidelines suggesting that these vehicles should either have safety officers on board or be remotely monitored.
 

In Shenzhen, Apollo Go received a licence in February to conduct trials in the Bao’an district, marking a significant step in expanding the use of autonomous vehicles across China.