China’s leading search engine company Baidu said its autonomous driving unit Apollo has received licences that could allow it to charge a fee for its free-of-charge robotaxi services in Cangzhou, a third-tier city in eastern Hebei province.
Baidu said on Monday that 35 of its robotaxis have been granted licences by the local Cangzhou government to begin commercial operations, while another 10 were given the green light to conduct road tests without a driver behind the wheel, a move that could reduce operating costs for the robotaxi fleet.
The licences will allow Baidu to explore various mechanisms for charging customers, such as “discounts, trial tickets, and voluntary payments from riders”, in a first for any autonomous driving company in China, the company said in a statement.
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The granting of the licences comes ahead of Baidu’s secondary listing in Hong Kong, slated for later this month, which could raise US$3.6 billion for the company. Baidu has focused its research and development efforts on artificial intelligence (AI) and autonomous driving-related businesses to bolster future growth amid a decline in its online marketing services revenue over the past three years.
Autonomous driving firms in China have attracted billions in investments, with multiple start-ups and tech giants competing for a share in a market expected to be worth 399 billion yuan (US$61.3 billion) by 2025.
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Baidu Apollo’s robotaxi fleet in Cangzhou was rolled out last August and has so far accumulated 524,696 kilometres of test mileage. The city is one of the smallest of several Chinese locations hosting Baidu robotaxi services. Last year, Baidu had about 30 vehicles operating in designated areas of Cangzhou, with residents able to book free rides using Baidu apps.
Most Chinese autonomous driving firms are still in the red and have stayed afloat through investments from outside sources such as venture capital, traditional carmakers, or tech giants. In addition, modifying a traditional car for autonomous driving is costly.
Each Baidu robotaxi in Cangzhou costs about 1 million yuan, with 20 per cent of that being for the car itself and the remainder for adapting the vehicle to autonomous driving, according to an Apollo employee, who requested anonymity because he was not authorised to speak publicly on the matter.
Then there are labour costs. Autonomous driving technologies, despite their notable advances in recent years, still cannot fully match the dexterity of human drivers in navigating complex, real-world traffic situations. Chinese authorities require self-driving car companies to have human drivers behind the wheel or in the back seat so they can take over driving in case of a deficiency in the computing system.
Baidu began developing autonomous driving technologies in 2013. As of March 2021, Baidu’s Apollo fleet had grown to 500 vehicles, most of which are operated on the Chinese mainland.
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