Pearls and Irritations

Since Baidu expanded its autonomous ride-hailing service Apollo Go in Wuhan in May 2022, the driverless taxi service has rapidly gained popularity among locals and visitors alike. It has become one of the city’s “must-try” experiences, drawing widespread attention from industry professionals both in China and abroad.

Market analysts have even suggested that Apollo Go’s development could pave the way for broader commercialisation of autonomous ride-hailing services in the future.

According to a forecast by global consultancy firm IHS Markit, China’s self-driving taxi market is expected to reach 1.3 trillion yuan (about US$183 billion) by 2030, accounting for 60% of the country’s ride-hailing market.

But what is it really like to ride in a self-driving taxi in China? Can such a business model succeed? And how do the government and the public perceive this burgeoning industry?

Novel experience

To explore this question, we took a ride in one of Apollo Go’s autonomous vehicles in Wuhan.

The process of booking was remarkably seamless. It took only a few minutes to access Apollo Go’s interface through a smartphone, and request a ride.

The vehicle, an ARCFOX αT all-electric SUV manufactured by Beijing Automotive Industry Corporation, was equipped with Baidu’s advanced robotaxi system, designed for user convenience. Registration required real-name verification via WeChat, but no additional app downloads or deposits were necessary.

During the ride, the autonomous system demonstrated its ability to handle various scenarios, such as navigating intersections, responding to sudden lane changes by other vehicles, and obeying traffic signals.

When faced with narrow roads or large vehicles, the robotaxi prioritised safety by maintaining a steady pace and avoiding risky manoeuvres like overtaking.

The vehicle’s careful selection of safe pull-over spots and its use of turn signals before lane changes further showcased its reliability and adherence to road safety protocols.

Baidu shared that its commercial pilot vehicles are covering an area of over 3000 square km in Wuhan. Some regions even offer 24-hour testing and demonstration services, underscoring Apollo Go’s ambition to lead the industry.

Business models

Apollo Go has established itself as a frontrunner in China’s robotaxi sector, outperforming competitors across several key metrics, including fleet size, geographic coverage, and total order volume, according to wallstreetcn.com, an online media platform.

As of October, it has deployed a fully driverless fleet of about 400 vehicles in Wuhan with plans to expand to 1000 vehicles by year-end. Nationwide Apollo Go had provided over 8 million robotaxi rides. In comparison, competitors like Pony.ai and WeRide operate approximately 100 vehicles each. Apollo Go’s services span 11 cities, including Wuhan, Guangzhou, Beijing, and Shanghai.

Despite this impressive lead, China’s robotaxi industry remains in its infancy. Early dominance does not guarantee long-term success, as seen in other sectors like shared bikes. Newcomers like Pony.ai and WeRide, which focus on driverless technology, remain strong contenders.

Profitability is a critical factor for the sustainability of robotaxi services. Apollo Go has made strides in cost reduction, particularly through partnerships with automakers to develop vehicles priced at 200,000 yuan.

Operational costs are another key consideration, especially the cost of safety personnel. Current regulations require a minimum ratio of one remote safety officer for every three vehicles. However, this ratio is expected to improve to one officer per ten vehicles within five years. This could reduce costs by 0.8 yuan per km and significantly enhance profitability.

Supportive ecosystem

The success of autonomous mobility depends not only on technological advancements, but also on a supportive regulatory and societal environment. Recognising this, local governments are implementing policies to foster innovation.

In July, five Chinese ministries designated 20 cities and city clusters as pilot zones for the application of “vehicle-road-cloud” integration for intelligent connected vehicles. These pilots, set to run from 2024 to 2026, aim to address challenges such as integrating multi-level transportation hubs, optimising urban road networks, and overcoming autonomous driving difficulties in less developed areas.

China’s existing road infrastructure, designed for human-driven vehicles, presents additional hurdles for autonomous systems. Enhancing traffic management and urban planning to accommodate robotaxis is essential for long-term success.

Public attitudes also play a pivotal role in the adoption of autonomous driving technology. A survey conducted by the Chinese Institute of New Generation Artificial Intelligence Development Strategies and Nankai Institute of Economics in Wuhan revealed that more than 90% of respondents perceive autonomous driving as safer than human-driven vehicles. More than 70% are willing to use fully driverless services.

Traditional taxi drivers in Wuhan, while acknowledging the inevitability of technological progress, voiced concerns about the challenges autonomous taxis pose to the traditional taxi business, highlighting a broader, unavoidable dilemma faced worldwide as new technologies reshape industries. Some local drivers suggested imposing certain restrictions on the service areas of autonomous taxis during the trial phase.

Experts believe autonomous taxis are set to become a cornerstone of intelligent transportation systems, promising the public a safer and more convenient travel experience. While the vision of a smarter, more seamless mobility landscape holds immense potential, its realisation hinges on sustained technological breakthroughs, robust regulatory frameworks, and society’s readiness to embrace innovation. These factors will determine how quickly this transformative shift reshapes the future of transportation.

(Wu Zhi, Xiong Qi, and Zhang Manzi also contributed to this story.)

Article updated December 28, 2024.

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