Baidu launches robotic taxi business after Beijing fare is approved

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On October 13, 2020, a few days after Baidu launched its Apollo Robotaxi trial operation, a security officer boarded a self-driving robot taxi in Beijing, China.

Zhao Jing | Vision China Group | Getty Images

BEIJING – The Chinese technology giant told CNBC this week that Baidu could collect robot taxi fares in certain areas of Beijing starting Thursday, marking Baidu’s important step towards establishing a driverless taxi business.

While regulators approve of China’s support for robotic taxis, local governments in the United States have been moving in a similar direction.

However, Beijing’s actions have additional weight.

The approval of the Chinese capital marks the first time that a big city like China has allowed companies to charge the public for robot taxis. Wei Dong, vice president and chief safety operation officer of Baidu’s intelligent driving division, said in an exclusive interview with CNBC that it has laid the foundation for the development of other cities such as Shanghai, Guangzhou and Shenzhen.

He expects these cities to take action later this year or early next year.

How much will it cost?

From Thursday, Baidu Apollo, which operates the robotic taxi business, can charge passengers in one of 67 self-driving cars in Yizhuang, a suburb of Beijing.

Although the company did not disclose the exact pricing, it said the fare will be comparable to the premium rides offered by apps such as Didi, which may cost twice as much as a regular ride.

Baidu will provide free robotic taxi services in Yizhuang from October 2020. As of Wednesday, the robot taxi app named “Robo Run” showed that the sample fare for 3 kilometers (1.86 miles) from Sam’s Club is 34 yuan ($5.31) from Yizhuang to a nearby subway station.

With Didi’s basic express service, the cost of the same route is about 14 yuan ($2.19). Didi’s sample premium class fare on the same route is 27 yuan.

So far, the novelty of free self-driving taxis has attracted some regular customers in Yizhuang. Wei said that more than 20,000 users ride at least 10 times a month. It is not clear how many people will continue to use the service when they have to pay, but Wei’s goal is to verify an additional 100 autonomous taxis each year.

China-U.S. Robot Taxi Competition Approved

Wei predicts that in the next year or two, regulatory momentum may broadly support the testing of fully driverless vehicles on public roads-those without a safe driver.

According to a report by Credit Suisse last month, the cost of a human driver accounts for about 60% of what ride-sharing users pay.

On November 16, AutoX, an autonomous driving company backed by Alibaba, claimed that its fully driverless robotic taxis are now operating in China’s largest single area-168 square kilometers (65 square miles) in the southern city of Pingshan District, Shenzhen. AutoX stated that it will allow the public to register for self-driving taxis starting in January. It is unclear whether there is a charge for riding.

Baidu’s commercial autonomous vehicle operation license covers an area of ​​60 square kilometers, including a small town called Yizhuang, which is home to many companies such as the headquarters of The area is located about half an hour’s drive south of downtown Beijing.

The Beijing Municipal Government also allows companies to test their projects in Yizhuang, thereby using Yizhuang as a testing ground for autonomous driving. These include JD’s unmanned delivery vehicles and Baidu’s robotic taxis.

Baidu’s expansion plan

Last week, Baidu CEO Robin Li stated that the company plans to expand the Apollo Go robotic taxi service to 65 cities by 2025 and 100 cities by 2030. This is an increase from the current five cities.

The company also announced that, compared with the previous generation, the manufacturing cost of its next-generation self-driving taxis will be reduced by half. These models are co-branded with three electric car manufacturers: Chinese start-up Weimar Motors, Aion (a spin-off company of state-owned GAC), and Arcfox of state-owned BAIC Group.

In June of this year, Baidu and BAIC claimed that they could produce 1,000 driverless cars at a price of 480,000 yuan (US$75,000) each, while the average cost of an autonomous car was 1 million yuan.

Wei joined the Baidu Intelligent Driving Group in May as CEO after seven years of working at Shouqi Limousine Company. The company operates a high-end version of Didi.

He said that Baidu’s strategy for building an autonomous taxi business is to reduce the cost of autonomous driving technology and target specific user scenarios.

Rather than making full use of lidar technology-which requires expensive sensors to create detailed maps before the robot taxi can run-Mr. Wei talked about using algorithms to improve the efficiency of hardware usage.

Read more about electric vehicles from CNBC Pro

On the consumer side, Wei said that Apollo will focus on providing users with an experience that transcends the means of transportation-for example, showing the streets of Beijing 20 years ago on the car windows instead of the current street scenes.

He said another strategy is to find ways to use robotic taxis for non-travel functions, such as medical spaces or public libraries.

Although Apollo is only a small part of Baidu, its development is consistent with the CEO’s efforts to convince investors that the broader company’s future lies in related fields such as artificial intelligence and autonomous driving.

The company’s fastest-growing area of ​​revenue in the third quarter was “non-online marketing revenue”, which increased 76% year-on-year to RMB 5.2 billion (US$806 million). Baidu attributes the growth to the demand for cloud computing and other artificial intelligence businesses.

— CNBC Arjun Capal Contributed to this report.

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