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On a recent summer night in central China, a couple on a motorcycle swerved in front of a driverless cab, forcing the vehicle to brake rapidly. At an intersection, it hesitantly performed a three-point turn, careful to avoid a man with a bike gawking at the new technology from the roadside.<\/p>\n
Welcome to Wuhan, the city of 14 million people that\u2019s shaking off its Covid-19 stigma to position itself at the vanguard of smart-car technology \u2014 and the difficult questions it raises about the impact artificial intelligence could have on jobs in China and around the world.<\/p>\n
More than 500 electric robotaxis<\/a> built by Baidu<\/a> Inc. currently ply the city\u2019s streets, with plans for an additional 1,000 to be deployed by year-end. The expansion positions Baidu and other Chinese firms as competitors with Alphabet Inc.\u2019s Waymo and out in front of Tesla Inc., which has\u00a0delayed<\/a>\u00a0its highly anticipated unveiling of robotaxi prototypes by about two months to October.<\/p>\n Moving fast to develop driverless taxis fits\u00a0into President Xi Jinping\u2019s playbook to bolster the economy by making high-tech industries the centerpiece of China\u2019s economic future, transitioning away from a dependence on property and lower-value exports. The nation is already home to the world\u2019s two biggest electric-vehicle battery manufacturers and dominates the EV supply chain, a result of state subsidies and cutthroat competition that\u2019s made constant innovation a must.<\/p>\n Yet, as Wuhan is discovering, running ahead of the curve can also have its drawbacks.<\/p>\n Already, residents are complaining that Baidu\u2019s robotaxis, deployed under the Apollo Go\u00a0brand in English, are causing traffic jams, partly because they\u2019re seen as driving too cautiously. Riffing off a phrase that sounds similar to the taxi\u2019s name in Chinese, Wuhan residents have christened the cabs \u201csilly radishes\u201d because they move at slower speeds and don\u2019t always respond to situations on the road the same way a human would.<\/p>\n And even though Wuhan\u2019s robotaxi fleet represents just a fraction of the total cab population \u2014\u00a0which employs an estimated 24,000 drivers, according to Shanghai-based outlet The Paper \u2014\u00a0there\u2019s growing anxiety over the economic implications of the city embracing driverless technology. That\u2019s especially true\u00a0in the ride-hailing industry, where some drivers\u00a0are already reluctant gig workers who lost their jobs in other sectors.<\/p>\n \u201cThe government needs to balance jobs and tech,\u201d said one Wuhan resident, who asked that he be identified by his family name, Wang. \u201cIt shouldn\u2019t only focus on wanting Wuhan to be a technologically developed city but also take care of the people who are still drivers.\u201d<\/p>\n Economists echo those concerns.<\/p>\n \u201cIt is exciting to witness robotaxis become reality, yet it\u2019s not clear how taxi drivers will face the challenge, and how the government will strike a balance between technological breakthroughs and weak labor market conditions,\u201d Zhiwei Zhang, chief economist of Pinpoint Asset Management Ltd. in Hong Kong, wrote in a recent note.<\/p>\n Baidu is encouraging people to try its service by heavily discounting fares. A recent 30-minute daytime journey covering almost 10 kilometers (6 miles) cost about 14 yuan ($1.93) after a company discount of almost 26 yuan. That\u2019s roughly one-third the cost of a comparable ride in a premium-class, human-driven taxi with the ride-hailing service Didi.<\/p>\n That pricing gap has frustrated some taxi companies, who say the experiment already has gone too far.<\/p>\n \u201cThe original intent of technology is to make human life better, but the reality is that it makes the lower class hungry,\u201d according to a statement signed by Wuhan Jianshe Automotive Passenger Transportation Co., which called for more restrictions on where the driverless cabs are allowed to operate.<\/p>\n The pricing scheme also makes the current strategy\u00a0commercially unviable<\/a>, JPMorgan Chase & Co. analysts including Alex Yao wrote in a report last month, citing \u201cdiscouragingly deep loss-making financials.\u201d<\/p>\n Wuhan government officials didn\u2019t respond to repeated requests for comment about the risk to jobs that robotaxis pose\u00a0or expansion plans for driverless car services in the city. Representatives for Baidu\u2019s Apollo Go business declined to comment on the potential impact on jobs from robotaxis.<\/p>\n Wuhan became China\u2019s biggest proving ground for Baidu\u2019s taxis partly because authorities there have taken a more relaxed regulatory approach relative to other regions and cities. There are also some practical advantages.<\/p>\n The city\u2019s geographic layout \u2014 it\u2019s composed of three distinct areas separated by rivers spanned by suspension bridges \u2014 and a driving culture known for not following the rules of the road\u00a0make it a complex and demanding testing ground.<\/p>\n Bloomberg News put the Baidu service to the test last month, hailing one of the\u00a0taxis via an app. Entering the vehicle, we found a transparent divider separating the passenger area from the unoccupied driver\u2019s seat. At one point, the car accelerated to a top speed of 50 kilometers per hour, though it was more typically traversing the busy streets at around 20 kph.<\/p>\n The sight of a steering wheel moving on its own was a little unsettling. The in-car entertainment system was reminiscent of those\u00a0available on a long-haul business-class flight, though the music selection was eclectic. At one point, our little robotaxi was cruising along the streets of Wuhan to the thumping electro house sounds of \u201cFast Cars and Superstars\u201d by Cristian Marchi.<\/p>\n Eric Hu, a 43-year-old insurance industry worker based in Shanghai, took advantage of a recent work trip to Wuhan to test out a robotaxi. Although similar services are available in Shanghai, he said they tend to be located in distant suburbs and are less useful to people working downtown.<\/p>\n Hu deemed his experience in Wuhan \u201cgood\u201d and said that he\u2019d become a regular user of driverless cars \u2014 if fares remain\u00a0low. He also expressed concern about the social impact of the technology.<\/p>\n \u201cIf all taxi drivers lose their jobs, then that\u2019s something that governments have to be worried about,\u201d he said.<\/p>\n Baidu founder Robin Li said during the company\u2019s first-quarter earnings call that, as of April 19, its driverless services had provided over 6 million rides across the country. The proportion of \u201cfully unmanned driving\u201d trips \u2014 the company also offers cars where a human sits in the driver\u2019s seat but doesn\u2019t touch the steering wheel unless needed \u2014 exceeded 55% and is expected to reach 100% over the next few quarters, he said.<\/p>\n China didn\u2019t get the first jump on driverless cars. Companies including\u00a0Waymo and General Motors Co.\u2019s Cruise have been honing driverless-vehicle technology for years in\u00a0San Francisco and other US cities.<\/p>\n But scaling robotaxi services has proven challenging.\u00a0Cruise was halted last year when one of its cars hit and dragged a pedestrian\u00a0who had\u00a0already been hit<\/a>\u00a0by a separate vehicle. Companies in the space have also faced public\u00a0backlash<\/a>, including acts of\u00a0vandalism<\/a>.<\/p>\n The US hasn\u2019t set hard rules or qualifications for companies deploying automated-driving technology, electing instead to publish\u00a0voluntary guidelines. Washington\u2019s approach contrasts with China\u2019s in that\u00a0Beijing has made driverless-car development\u00a0a strategic priority.<\/p>\n Still, the US\u2019s early start means China has some catching up to do, according to Kevin Xu, a US-based technology investor and founder of Interconnected Capital.<\/p>\n \u201cTop Chinese self-driving companies like Baidu and Pony are making great progress, but by no means are they leading their US counterparts,\u201d Xu said, referring to Pony.ai, a startup that\u2019s\u00a0partnered with Japan\u2019s Toyota Motor Corp. \u201cThat being said, China does have a somewhat more friendly or receptive regulatory environment toward self-driving cars.\u201d<\/p>\n In one of the latest indications of China\u2019s welcoming approach, authorities in Hengqin, an island in the south, ruled this week that autonomous vehicles can now be tested on any public road, allowing self-driving cars to interact with a much wider range of traffic conditions.<\/p>\n Tesla is one potential competitor that, in theory, could have an advantage over Chinese firms. But so far, it appears to be on the back foot.<\/p>\n The company\u2019s stock climbed early this year on optimism about Elon Musk\u2019s planned robotaxi unveiling, seeing it as a potential sign that the company will make good on his\u00a0years of predictions<\/a>\u00a0about self-driving Teslas. But the August event\u00a0was pushed to October, and some analysts have warned that investors\u2019 high expectations\u00a0could be misplaced<\/a>.<\/p>\n