Concerns Rise Over Super Cheap Robotaxi Rides in China

In Wuhan, China, residents can travel six miles in a driverless taxi for a mere 50 cents, thanks to the rapid rise of Robotaxi services. This new transportation trend, driven by tech giant Baidu’s Apollo Go, aims to make Wuhan the world’s first driverless city, even though the vehicles often struggle with basic navigation.

A recent video showing a passenger extolling the virtues of these robotaxis has garnered over 80 million views on Weibo, China’s social media platform. Apollo Go’s fleet of 500 driverless vehicles serves about half of Wuhan’s population of 11 million, with fares starting at just 55 cents, compared to the $2.48 for human-driven taxis.

Launched in 2022, Apollo Go’s service gained significant traction this year. The company plans to expand its fleet to 1,000 cars by the end of 2024, but this rapid adoption has caused anxiety among China’s gig economy workforce, already grappling with stagnant wages due to economic challenges.

“With the Chinese economy struggling, people are more fearful of job losses, and this serves as a reminder of one potential cause,” said Tu Le, managing director of Sino Auto Insights. He noted that significant job losses could still be a few years away.

China’s economy grew at a slower pace of 4.7% in the second quarter of 2024, missing expectations of 5.1%. Amidst this backdrop, residents in Wuhan have reported issues with traffic jams caused by the driverless cars’ inability to navigate traffic lights properly. Earlier this month, a Robotaxi ran a red light and hit a pedestrian.

The backlash against Apollo Go’s pricing tactics became a hot topic on Weibo, with over 75 million users discussing the issue last week. Critics argue that the low prices are disrupting the market and threatening livelihoods. An Apollo Go spokesperson, however, defended the pricing strategy as a temporary measure to encourage trial use, supported by local government subsidies.

While autonomous taxis are still a niche service in many cities worldwide, China’s aggressive push could make it the leading market for automated vehicles. A 2023 McKinsey report predicts that China’s autonomous vehicle sector could generate $300 billion to $400 billion in revenue by 2035, bolstered by government support.

Several major Chinese cities, including Wuhan and Shenzhen, have granted commercial licenses for driverless services. Shanghai recently issued licenses to Apollo Go and Alibaba-backed AutoX for operations in the Pudong New Area. Authorities in Beijing and other cities are also developing regulations to manage the use of autonomous vehicles.

As China continues to advance its Robotaxi services, the country is set to become a major player in the global autonomous vehicle market, despite the current concerns and challenges.