Beijing Approves Baidu’s Robotaxi for Commercial Use

Beijing Approves Baidu’s Robotaxi for Commercial Use

China’s Baidu robotaxi will start charging ride fees from Thursday, the self-driving vehicle startup has told CNBC, marking a new era in the cab industry.

Baidu, like its U.S. counterparts, Waymo, Tesla and Cruise, has been working on the technology to produce trustworthy driverless vehicles that can be approved by regulators.

Chinese regulators approved Baidu to operate in Beijing ahead of U.S. companies when local authorities in the U.S. are still working to set the driverless taxis rolling in U.S. cities. Baidu’s permit for commercial autonomous vehicle operations covers a 60 square kilometer area, including a town called Yizhuang that’s home to many businesses such as JD.com’s headquarters. The region is about half an hour’s drive south of central Beijing, CNBC said.

Baidu’s Intelligent Driving Group told CNBC in an exclusive interview that the approval sets precedent for other Chinese cities.

“It sets the stage for other cities like Shanghai, Guangzhou and Shenzhen to do the same,” says Wei Dong, vice president and chief security operation officer, at He, adding that he expects those cities to act later this year or early next year.

Self-driving cars have been on trials in China’s cities for long, with focus on efficiency. The approval for Baidu to operate commercially in Beijing means the trials have reached a satisfying stage. But then, it may disrupt the transport market.

The “How much will it cost?” the question has been an integral part of robotaxis’ rollout, since the cost of rides will form a large part of its success. CNBC analysis took a dig at the question.

Effective Thursday, Baidu’s Apollo unit that runs the robotaxi business can collect fares from passengers taking one of 67 self-driving cars in Beijing’s suburban district of Yizhuang.

While the company did not disclose exact pricing, it said fares would be comparable with the premium level ride-hailing charges available through apps like Didi, which can cost twice as much as ordinary rides.

Baidu has offered free robotaxi rides in Yizhuang since October 2020. As of Wednesday, the robotaxi app, branded “Luobo Kuaipao,” showed a sample fare of 34 yuan ($5.31) for a 3-kilometer ride (1.86 miles) from a Sam’s Club in Yizhuang to a nearby subway station.

The same route costs about 14 yuan ($2.19) through Didi’s basic express car service. Didi’s sample premium level fare for the same route is 27 yuan.

So far, the novelty of a free, self-driving taxi has drawn a number of regular users in Yizhuang. Wei said more than 20,000 users each take at least 10 rides a month. It’s unclear how many will keep using the service when they have to pay for it, but Wei aims to get an additional 100 robotaxi cars verified each year.

Though trust in the capability of the robotaxi is growing, consumers are still largely skeptical. This means, a lot of commuters would choose a manned cab over self-driving one. And that poses a challenge to the profitability of the emerging market.

In the past few years, there has been an uptick in the push to develop robotaxis, in China and the United States. It has created a spontaneous competition between the two superpowers, and China, with this Baidu’s commercial operation approval, is winning.

The Beijing city government has made Yizhuang a testing site for autonomous driving by allowing companies to trial their projects there, just as some local governments in the U.S. have done to accelerate production.

With many of the companies, including AutoX, Alibaba-backed autonomous driving vehicle, nearing the last stages of their trials in China, the manned taxi market will soon have the robotaxis to compete with.

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