China's robotaxi campaign raises concerns about drivers' job security

In April, more than 70% of Baidu Apollo Go robot taxi rides in Wuhan were fully autonomous. In May, the company said it expected 100% of rides to be fully autonomous in the coming quarters.

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BEIJING — China's decades-long effort to develop robotaxis is starting to gain traction among consumers. But it's also raising concerns among taxi drivers, who fear losing their jobs amid increased competition.

Like GM's Cruise and AlphabetWaymo has rolled out self-driving taxis in San Francisco and Phoenix, Arizona, and local Chinese governments from Beijing to Guangzhou have allowed domestic players to operate robo-taxi rides to the public.

This week, the growing popularity of robotaxis in China trended on social media.

On Thursday morning, videos about fully autonomous taxi experiences were the twelfth most popular topic on Douyin, the Chinese version of Bytedance's TikTok.

BaiduThe company's Apollo Go robotaxi unit became one of the 10 most popular hashtags on social media platform Weibo on Wednesday, after reports of its rapid adoption by users in the city of Wuhan.

The company began deploying fully self-driving vehicles in certain districts of Wuhan, 24/7 in March.

Wuhan is the largest operating region for Baidu's Apollo Go, one of the largest robotaxi operators in China. The company has more than 500 robotaxis in the city and plans to increase that number to 1,000 by the end of the year.

When CNBC contacted Baidu, he had no official updates to share.

The increased attention to robotaxis comes as major Chinese cities ramp up support, while smaller cities have imposed restrictions on ride-hailing apps in recent months.

Riding Baidu's self-driving robotaxi

Top social media posts on Wednesday quickly drew conclusions from the robotaxi tests in Wuhan and predicted an imminent nationwide rollout, generating hashtags like: “Did self-driving taxis steal people’s rice bowls?” according to a Chinese translation by CNBC.

In late June, a Wuhan taxi company also put out a call on social media, asking for lower taxes and tighter restrictions on Apollo Go robotaxis and the number of taxis.

CNBC was unable to independently verify the document, which said the taxi company had been forced to retire four of its 159 cars since April due to declining revenue.

Wage growth in China has slowed overall from around 10% annual increases before the pandemic to 4% in recent years, according to a Goldman Sachs analysis published last month. The pace improved to 5.6% year-on-year growth in the first quarter, the report said.

More and more drivers offering taxi rides

The emergence of new businesses and taxi companies has led some local governments to restrict the sector.

The city of Guyuan in the Ningxia Autonomous Region has announced that from May 12, the suspension of online taxi companies.

“The taxi market in our city is already saturated,” the announcement said in Chinese, translated by CNBC.

Separately, the southwestern city of Guiyang new taxi licenses withdrawn for six months through June. The announcement said authorities could remove a number of non-compliant taxi companies and cars.

China had more than 7 million registered taxi drivers according to the Ministry of Transport at the end of May.

That is approximately twice as many versus the 3.51 million drivers reported for July 2021, and 570,000 more drivers than the ministry reported in November.

For comparison, the U.S. had nearly 400,000 taxi drivers, cab drivers, shuttle drivers and chauffeurs in 2022, according to the latest available figures from the Bureau of Labor Statistics.

According to the Ministry of Transport, the number of taxi companies in China has also increased, from 241 in 2021 to 351 in May this year.

China pushes ahead with support for robotaxis

Several Chinese ministries in January published a plan to promote cars with cloud connectivity, including testing of at least 200 low-speed unmanned vehicles in each pilot areaLast week the same authorities published a list of 20 first pilot citiesincluding Beijing, Shanghai, Chongqing and Wuhan.

These cities have already allowed robotaxi operators to test cars in suburban areas.

In November 2021, the city of Beijing began allowing Baidu's Apollo Go and startup Pony.ai to collect fares from the public for rides with a safety driver in the robotaxis.

Last year, the city of Beijing made operators remove all personnel from some vehicles. The city published draft rules last month that responsibility for a robotaxi traffic violation with the owner and manager of the car, if there is no driver.

Rides to the public are currently subsidized and the number of vehicles on the road is still much lower than that of traditional taxis.

The Apollo Go app on Thursday showed that a 45-minute robotaxi ride from Daxing Airport to a southern Beijing suburb would be fully subsidized — the entire 193.84 yuan ($26.66) fee was waived. The app also showed that a 16-minute robotaxi ride within that Beijing suburb would cost 10.36 yuan, about half the 20 yuan fare quoted by ride-hailing apps, which can call cabs.

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Baidu

Baidu CEO Robin Li told investors in May that more than 70% of Apollo Go robotaxi rides in April were fully self-driving, with no human crew. He predicted that the share would reach 100% in the coming quarters — making Apollo Go in Wuhan the first to break even.

The city is the capital of Hubei province, which announced in a June 1 article that it aims to the world's first autonomous driving city.

“I just got my driver’s license… and there are already self-driving cars? What was the point of taking the test?” read a Chinese comment on the article, translated by CNBC.

“In the short term, autonomous driving cannot replace the car driver,” the Hubei government responded.

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