news

Text｜Yin Xin, special contributor to Caijing E Law

Editor |Guo Liqin

"My first feeling was not novelty, but fear." Xiao Teng spent four years of college in Wuhan. After graduation, he stayed in Wuhan to work. In mid-July, he completed his first experience of riding in a self-driving online car-hailing vehicle.

When Xiao Teng was in the car, he felt that he had entrusted his safety to a cold machine instead of a warm person. "Will it lose control? Will it crash into the building on the street with me? Questions popped up in my mind," Xiao Teng said.

It was an uneasy journey. "When the steering wheel in front of me turned by itself, I felt very spiritual. I am the master when driving, I am half the master when sitting in the car, but I am just a subordinate in the automatic driving." After passing a few intersections, Xiao Teng found that its brakes were not bad. "Every time I changed lanes, I turned on the lights in advance, which was very disciplined. I felt relieved." Xiao Teng told us that he was no longer afraid when he got off the car and wanted to do it again.

In 2021, Luobo Kuaipao has already started commercial trial operation. According to its official website,Currently, LuoBoKuaiPao has entered 11 cities including Beijing, Guangzhou, Shanghai, Shenzhen, Chengdu, Wuhan, and Changsha.The total test mileage has exceeded 100 million kilometers, but only in Wuhan did it receive attention comparable to the "top stream".

Wuhan is advancing the legislation process for autonomous driving as usual. On July 26, the Legal Affairs Committee of the Wuhan Municipal People's Congress and the Legal Affairs Committee of the Standing Committee of the People's Congress held a pre-voting evaluation meeting to listen to the revision suggestions of all parties on the second draft of the "Wuhan Intelligent Connected Vehicle Development Promotion Regulations (Draft)", which is expected to be submitted to the 20th meeting of the 15th Standing Committee of the Wuhan Municipal People's Congress for voting in August this year.

When the noise gradually fades away, it is time to look back and look forward.

Why has Wuhan's autonomous driving progress attracted so much attention? As one of the important scenarios for the commercialization of autonomous driving technology, how far is driverless online ride-hailing from large-scale operation?

01

Truly “no one”

Wuhan City’s Luobotao has truly achieved a high proportion of “unmanned” operation.

Since December 2022, there have been carrot runners in Beijing Yizhuang Development Zone. The significant difference from Wuhan is that there was a safety officer in the vehicle I experienced in Beijing Yizhuang.

In mid-July 2024, I experienced the service in Yizhuang, Beijing. Compared with cold machines, real people with warmth bring a completely different feeling. While driving, the safety officer's eyes look in the same direction as the driver. Every time he turns and merges, he has to keep an eye on all directions, but his hands do not touch the steering wheel. It seems that the safety officer is a "backup driver" and a driver on standby at any time.

During the experience, when the car was merging from the main road to the secondary road, the brakes were a bit too strong and the steering was too strong, so the safety officer took over the vehicle. He immediately grabbed the steering wheel and corrected the unnecessary steering. At this moment, he was completely the same as the driver.

"Beijing's strategy is relatively cautious at present, and most of them have safety officers on duty in the car, while Wuhan has a higher rate of unmanned operation," said a person in charge of an autonomous driving company who did not want to be named. Another source revealed that in April 2024, the unmanned rate of Luobo Kuaipao in Wuhan had reached 70%.

The so-called "unmanned" means that the safety officer is not in the car, but is on duty remotely, monitoring the vehicle's driving status on the driving simulator in the control center.

"There is a big difference between remote duty and in-car duty, and this is not just a matter of passengers' subjective feelings." A person who used to work at an autonomous driving technology company said that according to the L0-L5 classification of autonomous driving, "unmanned" can reach L4, which is highly automated autonomous driving. Although the technical level is higher, there will be a delay in the real-time status of the car being transmitted to the driving simulator, and the remote duty safety officer may not be able to take over in the first time like the in-car safety officer. "When a passenger is unwell or the vehicle encounters a serious malfunction, the remote safety officer cannot provide immediate on-site assistance." The person said.The biggest role of the remote safety officer is to take over when the car is "stuck" for some reason.

Current regulations do not require that there be "someone" in the car, but a certain ratio of people to cars must be met. The "Guidelines for Transportation Safety Services of Autonomous Driving Vehicles (Trial)" issued by the Ministry of Transport in November 2023 stipulates thatSafety officers can be on duty inside the vehicle or remotely; the ratio of people to vehicles must not be less than 1:3 (one remote safety officer monitors three vehicles).

"Having safety officers on duty in the car is just a temporary transition. Moving the safety officers outside the car is the ultimate goal." A person working for the traffic management department of a city in South China said that transportation has always been a labor-intensive industry. As long as there are safety officers or drivers in the car, there is no way to get rid of the huge labor costs; only when people are removed can industrial upgrading come."Only Wuhan has achieved true 'no-man', so this novel experience has caused a stir," the person said.

The safety officers of most self-driving vehicles have been moved outside the vehicles, allowing passengers to interact one-on-one with the machines, making Wuhan the first city to "take the lead".

02

A direct confrontation with traditional online ride-hailing services

Another difference in Wuhan is that it has opened up the city’s core area to carpooling.

In February 2024, Luobo Kuaipao's business area in Wuhan expanded again, from parts of Hanyang and Hankou, across the Yangsigang Yangtze River Bridge and Wuhan Baishazhou Bridge, to the territory of Wuchang.So far, its operating scope has occupied most of Wuhan’s urban area, with a radiation area of ​​more than 3,000 square kilometers and a population of more than 7 million, including a large number of core urban areas.

"Opening the core area to self-driving online ride-hailing vehicles is completely different from conducting closed tests in the suburbs," explained the aforementioned person who works for the traffic management department of a city in southern China.The biggest demand for people's travel in urban areas is not small-scale transportation within the remote suburbs, but transportation between core areas. The two are completely not on the same scale.The so-called transportation between core areas is most typically daily commuting, or going out for business, traveling between the CBD and other core areas; as well as starting from the residence, going to the commercial district to dine with friends, and then returning to the residence.

Wuhan is the only city where self-driving online ride-hailing vehicles can meet mainstream travel needs. Because of this, Luobo Kuaipao and traditional online ride-hailing vehicles came into direct contact for the first time.

Passengers who are used to taking taxis and traditional online ride-hailing services for daily commuting now have an additional option, which is currently very cheap: a journey of less than 10 kilometers only costs Xiaoteng 3 yuan - most of the fare comes from subsidies and does not need to be paid by passengers. Someone uploaded a short video online, in which a passenger shouted "3.9 yuan for 10 kilometers, I don't want to buy a car anymore!"

With the low-price "new customer acquisition" strategy, Luobo Kuaipao's business in Wuhan has grown significantly: the peak number of orders per day has reached 20. Xiaoyu, an online car-hailing driver living in Haidian District, Beijing, told reporters that in Beijing, where the population is much larger than Wuhan, 20 orders is considered a lot for drivers working the day shift.

In the operation of online ride-hailing platforms, drivers’ labor costs account for the bulk of the cost.In 2021, Didi Chuxing announced the proportion of various costs in the total fares paid by passengers in 2020, of which freight and subsidies paid to drivers exceeded 79%;The company's operating costs, including technology research and development, servers, security, customer service, manpower, and offline operations, account for less than 7% of the total fare.

Judging from the current scale of operation, self-driving online ride-hailing vehicles are not yet sufficient to have a substantial impact on traditional online ride-hailing vehicles. According to data provided by Baidu, as of the first quarter of 2024, the number of autonomous driving online ride-hailing vehicles since the start of road testing has reached 1.3 billion yuan.Total order quantity is 6 million; The Ministry of Transport’s online car-hailing regulatory information interaction system recorded 944 million orders in May 2024.The average daily number of orders exceeds 31.46 million.

03

Legislation is at the forefront

Wuhan is at the forefront of autonomous driving legislation.

At present, the cities that have local legislation on autonomous driving include Suzhou, Guangzhou, Beijing and Wuhan. Suzhou officially issued its legislation in the second half of last year, while Guangzhou, Beijing and Wuhan are currently in the review or opinion soliciting stage.

The draft of Wuhan local regulations will be issued in April 2024. On April 18, the 17th meeting of the Standing Committee of the 15th Wuhan Municipal People's Congress reviewed the "Wuhan Intelligent Connected Vehicle Development Promotion Regulations (Draft)". In other words,Before the large-scale implementation of the "Carrot Run" policy, Wuhan had already begun laying the groundwork at the local legislative level. On June 21, the second draft of the bill entered the review process of the Municipal People's Congress Standing Committee.

On July 26, the Legal Affairs Committee and the Legal Affairs Committee of the Standing Committee of the Wuhan Municipal People's Congress held a pre-voting evaluation meeting. Experts from universities, economic and information departments, transportation departments and lawyers proposed amendments to the "Wuhan Intelligent Connected Vehicle Development Promotion Regulations (Draft)". After that, the draft will be submitted to the 20th meeting of the 15th Standing Committee of the Wuhan Municipal People's Congress for voting in August this year.

Many cities are simultaneously advancing legislation and providing legal norms for the autonomous driving industry, but their attitudes towards autonomous driving are not the same, and the differences can be seen in the conditions of the test areas/road sections open to them.

Since 2020, many cities in China have begun to build driverless manned test areas or sections. The names of the test areas in different places are different. For example, in Beijing, it is called the "High-level Autonomous Driving Demonstration Zone"; in Guangzhou, it is called the "Intelligent Connected Vehicle (Autonomous Driving) Road Test Pilot Zone". Public information shows that some test areas have stated that the area has achieved an integrated coverage of "vehicles, roads, clouds, networks, and maps" infrastructure. These test areas are open to all driverless companies (vehicles) for manned technology verification. The commercial trial operation of driverless online ride-hailing vehicles such as Carrot Fast Run and Pony.ai has also quietly started in these areas. According to data from the Ministry of Industry and Information Technology, as of June 2024, China has a total of 32,000 kilometers of open test sections.

Public data shows thatThe earliest testing area in Beijing was 160 square kilometers.Located between Yizhuang and Daxing International Airport;Shanghai is located in the coastal and port area, which is only 68 square kilometers; Guangzhou has opened827 test roads,Located in Huadu, Huangpu, Nansha and other remote suburbs; Shenzhen944 kilometers of openTest roads, but most of them do not extend into the "four districts within the customs"...Unlike Wuhan, autonomous driving tests in various places have not been widely integrated into core areas.

"Wuhan is quite advanced because of the government's strong support for autonomous driving." The aforementioned person who once worked in an autonomous driving technology company said that in early 2024, there were rumors in the industry that Wuhan would promote autonomous driving as its city's business card.On May 15, Baidu held a launch ceremony for the sixth-generation Carrot Run driverless car in Wuhan and announced that Carrot Run will cover the entire city of Wuhan by the end of 2024, with 1,000 vehicles put into operation and achieve a balance between income and expenditure.

The aforementioned person who works for the traffic control department of a city in South China said,Currently, his city has very strict requirements for open roads. Only areas with sufficient width, separate lanes, and mixed traffic of driverless vehicles can become test sections. These requirements will not change in the short term.He said that at this stage, he hopes to establish a good impression of the public on autonomous driving. Only when the public widely accepts it can it be put on the road on a large scale. "At present, autonomous driving has not yet gone beyond the stage of technical verification in all cities, including Wuhan." This person said that the most important thing at this stage is for operators to continue to prove the safety and reliability of the technology.

Most cities are still moving cautiously:For example, in March 2024, Beijing announced that it would build a total of 440 square kilometers of new test areas within the year. However, these areas still do not involve the core urban areas and are located in Tongzhou District and Shunyi District respectively; the test of Shanghai Lingang just started in early July; Shenzhen just announced the sixth batch of test roads not long ago, and there are no new plans in the short term.

04

Can break-even be achieved?

Luobo Kuaipao's statement that "revenue and expenditure will be balanced in Wuhan within the year" has aroused widespread attention and discussion.

Ying Ying, chief computer analyst at CITIC Securities, once wrote an article to estimate: According to the figures released by Baidu, the cost of a single sixth-generation Carrot Express driverless car has dropped to 204,600 yuan.Based on this calculation, assuming that each vehicle can reach a peak of 20 orders per day, if the company does not provide subsidies to passengers and charges the original price, each vehicle can break even by running 91.95 kilometers per day. However, if the company pays out huge subsidies and the average price per order is only in the single digits, a single vehicle would have to run nearly 600 kilometers per day to break even, which is significantly higher than the upper limit of the daily mileage that each vehicle can travel.Based on this, Ying Ying said that if passenger acceptance is not high after the subsidies are cancelled, it will directly affect the development pace of autonomous driving online ride-hailing services.

Take Xiao Teng's trip in Wuhan at 5 pm on a weekend as an example. For a 8-kilometer trip that took 20 minutes, the pre-subsidy price for Luobo Express was 38 yuan, while the taxi was less than 20 yuan, and the Didi Express was slightly more than 20 yuan. For a 5.7-kilometer trip in Yizhuang, Beijing, the pre-subsidy price was close to 40 yuan, while the Didi Express price for the same distance was less than 20 yuan. If the subsidy is removed,The price difference of nearly two times makes self-driving online taxis less competitive than traditional online ride-hailing vehicles.

Based on the average single-digit price per order, the 400 sixth-generation Carrots that have been put into operation in Wuhan, even if the daily peak order volume reaches 20 orders, the daily revenue in Wuhan is only a few tens of thousands of yuan.

"If we continue to subsidize, we will continue to lose money. If we stop subsidizing, no one may ride the car." Guo Xin, the founder of Beijing Pegasus Brigade, pointed out the difficulty of achieving a break-even point for autonomous driving online ride-hailing. He believes that the more realistic approach to commercial operation of autonomous driving is to first realize unmanned freight, that is, to use unmanned freight vehicles in docks, warehouses, factories and industrial parks.

Guo Xin believes that self-driving ride-hailing services will not be able to recover their costs for a long time, and will be in an awkward situation where no one will be interested in them once subsidies are cancelled. He said that in addition to the high operating costs, the initial research and development requires huge investment. "If the initial investment is taken into account, the break-even point will be even more distant."

Guo Xin said that Wuhan is both a technology testing ground and a business testing ground. It remains to be seen whether Luobo Kuaipao can achieve its goal of balancing revenue and expenditure by the end of 2024 here.

(Xiao Teng and Xiao Yu in the article are pseudonyms)