China’s robotaxi push is raising concerns about job security for drivers

BEIJING – China’s years-long effort to develop robotaxis is starting to gain traction among consumers – but it is also alarming taxi drivers who worry about losing their jobs due to increasing competition.

Like GM‘s Cruise and Alphabet‘s Waymo has rolled out driverless taxis in San Francisco and Phoenix, Arizona, and local Chinese governments from Beijing to Guangzhou have allowed domestic players to provide robotaxi rides for the public.

This week, the rising prominence of robotaxis in China started trending on social media.

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

Baidu‘s robotaxi unit Apollo Go became one of the top 10 trending hashtags on social media platform Weibo on Wednesday after reports of rapid user adoption in the city of Wuhan.

The company began operating 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 contacted by CNBC, Baidu had no official updates to share.

The increased attention to robotaxis comes as major Chinese cities are ramping up support, while smaller cities have restricted the app’s ability to offer taxi rides in recent months.

The top social media posts on Wednesday quickly extrapolated from Wuhan’s robotaxi tests, predicting an imminent nationwide rollout and spawning hashtags like: “Are self-driving cars stealing people’s rice bowls.” This is evident from a CNBC translation from Chinese.

An appeal also circulated on social media at the end of June from a taxi company in Wuhan, which was seeking lower taxes and more restrictions on the Apollo Go robotaxis and on the number of ride-along cars.

CNBC could not independently verify the document, which claimed the taxi company had to retire four of its 159-car fleet since April due to declining revenues.

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

A wave of new companies and taxi drivers, meanwhile, has prompted some local governments to clamp down on the sector.

The city of Guyuan in the Ningxia Autonomous Region announced that this was the case as of May 12 suspending online taxi companies.

“Our city’s taxi market is already saturated,” said the announcement in Chinese, translated by CNBC.

Separately, the southwestern city of Guiyang did new journey permits suspended for six months until June. The announcement stated that authorities could remove some non-compliant businesses and cars.

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

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

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

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.

Multiple Chinese ministries released a plan in January to promote cloud-connected cars, including testing at a minimum 200 low-speed unmanned vehicles in each pilot region. Last week the same authorities published a list of 20 first pilot citiesincluding Beijing, Shanghai, Chongqing and Wuhan.

Robotaxi operators have already been able to test cars in those cities suburban areas.

The city of Beijing in November 2021 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 had operators remove all staff from some vehicles. The city released draft rules last month detailing the responsibility for a traffic violation involving a robotaxi on the car owner and manager if there is no driver.

Public rides are currently subsidized and the number of vehicles on the road is still much lower than that of traditional taxis.

The Apollo Go app showed on Thursday that a 45-minute robotaxi ride from Daxing airport to a southern suburb of Beijing would be fully subsidized – with the entire 193.84 yuan ($26.66) fee 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 rate quoted on taxi apps, which can call taxis.

Baidu CEO Robin Li told investors in May that more than 70% of Apollo Go robotaxi rides in April were completely driverless, with no human staff on them. He predicted the stock would reach 100% in the coming quarters, allowing Apollo Go to be the first to break even in Wuhan.

The city is the capital of Hubei province, which proclaimed its efforts in a June 1 article to promote the the world’s first autonomous driving city.

“I just got my driver’s license… and driverless cars already exist? What was the point of me taking the test?” according to a Chinese commentary on the article, translated by CNBC.

“In the short term, there is no way that autonomous driving can replace drivers,” the Hubei government report said in its response.