On August 30, Chinese ride-hailing service Didi Chuxing announced that it secured government approval to launch an autonomous vehicle pilot program in Shanghai. As part of the initiative, the company will deploy 30 self-driving cars in the city’s Jiading District. The program will provide locals with free driverless rides and is scheduled to begin in a few months.
While autonomous vehicle pilot programs are nothing new, Didi’s is unique in a few different aspects. For one, the program will involve the use of Level 4 autonomous vehicles. According to the Society of Automotive Engineers, Level 4 self-driving cars should operate independently within a designated geographic area. Notably, the company confirmed that it would be sending out taxis with and without human operators.
Additionally, Didi’s initiative is unusual because it will take place in such a crowded area. Currently, Shanghai has a population of more than 34 million densely packed citizens. The Jiading District is home to the sprawling Hujia Expressway and the Shanghai Hongqiao International Airport, which is China’s seventh busiest. As such, the firm’s autonomous driving artificial intelligence will be put through its paces as it is forced to adapt to such a hectic and fast-paced environment.
Reuters reported that Chief Technology Officer Bo Zhang stated that Didi plans to expand its program to Beijing and Shenzhen in 2020. In 2021, the company intends to move its robo-taxi operations outside of China.
If Didi’s pilot program succeeds, it will have a significant impact on the global autonomous vehicle and ride-hailing sectors.
For instance, Alphabet subsidiary Waymo is currently testing Level 4 driverless cars in an area totaling just under 100 miles divided amongst multiple locations. As per state law, all of the firm’s vehicles have human operators at the helm. Conversely, Didi’s initiative covers 228 square miles and involves cars without safety drivers. Provided that Didi’s cars satisfy government regulators, the firm could beat tech giants like Google, Tesla, and Apple to the autonomous vehicle punch.
Furthermore, Didi proving the viability of its self-driving cars would be a major blow to its longtime rival, Uber. The two firms came into conflict years ago when the American company tried to establish a presence in China. However, after spending $2 billion to break into the Sino market, Uber sold its Chinese business to Didi in exchange for a 17.7 percent ownership stake in 2016.
Despite coming to terms three years ago, the two firms are still fierce competitors. Last year, Didi established a beachhead in North America by beginning operations in Mexico. If the firm’s self-driving program is successful, expanding it to Mexico would make sense. Along similar lines, Uber’s $7.3 billion autonomous vehicle unit would lose value if a rival beats it to the market.
It’s also worth noting that offering a self-driving taxi service could help Didi become profitable a ride-hailing company. Like Uber and Lyft, the firm has never made a profit and lost $1.6 billion in 2018. By conquering the autonomy problem, the Sino corporation would attract an influx of outside investment, consumer interest, and media attention.