Shenzhen’s shift into robotaxis leaves drivers by the wayside

China’s southern technology hub of Shenzhen is paving the way for the roll-out of self-driving vehicles, a move that puts it at the forefront of the march to automation but is set to anger hundreds of thousands of hard-pressed taxi drivers.

The rules, which will allow the government to permit robotaxis from July 1, stand to threaten an army of taxi and ride-hailing drivers in one of China’s biggest cities, many of whom have already been displaced by automation and offshoring from the factories that powered the country’s breakneck economic growth.

“It’s a capitalist operation, driven by personal gain, aiming to monopolise the industry,” said a Shenzhen taxi driver surnamed Dai, who drives for the dominant ride-hailing app Didi, of the robotaxis.

“What will become of” the families who rely on China’s millions of taxi drivers, he added. “It’s incredibly cruel.”

Shenzhen was one of the engines of southern China’s manufacturing boom, drawing migrant workers in the 1980s and 1990s to a special economic zone that churned out low-cost goods and earned the region its reputation as the world’s factory floor.

In the decades that followed, it transitioned to higher-value technology and swelled into a megacity, hosting leading companies, including Huawei, Tencent, BYD and DJI, and an economy that has now surpassed that of neighbouring Hong Kong.

The taxi sector, meanwhile, has become an increasingly important part of China’s vast gig economy, as growth has slowed and migrant workers have been forced out of traditional manufacturing. China has an estimated 320 million flexible workers, which include ride-hailing and delivery drivers as well as some manufacturing and construction workers.

But the sector is showing signs of strain. Shenzhen has nearly 400,000 drivers licensed to provide taxi services on 26 platforms, according to the city’s transport authority, which warned in May that the “saturated” ride-hailing market was producing an average of just over 13 fares a day, less than what most drivers say earns them a decent wage.

The new rules will allow the Shenzhen government to promote the “orderly development” of robotaxi tests, demonstrations and commercial pilots either in select zones or citywide. They follow robotaxi pilot projects in recent years by operators, including Pony.ai and Baidu, in select areas.

But drivers, already facing greater competition on the streets for fewer fares, fear the impact of full robotaxi commercialisation.

Taxi driver Cheng Yonggang moved from Chongqing to Shenzhen nearly 30 years ago to work in its factories. He then became a driver, only to face increased competition from ride-hailers that pushed down prices.

Cheng, now 53, said he now worked 12-hour days, earning about 11,000 yuan (S$2,100) to 12,000 yuan a month to support himself and his elderly mother. “Anyone who drives taxis or ride-hails is worried (about robotaxis) – it’ll steal our business,” he said.

When the Financial Times visited the Shenzhen tech district of Nanshan, where robotaxis have been operating under a trial scheme, self-driving fares were higher than the most affordable ride-hailing operator but lower than traditional cabs.

The robotaxi roll-out also reflects looming tensions around an automation drive that policymakers see as a solution to China’s ageing population. The UN projects that the country’s workforce will shrink from one billion over the last decade to 300 million by 2100.

While some robots are being applied to “dirty, dangerous and difficult” manufacturing jobs that are increasingly unappealing to workers, “there is a very serious risk of all these machines taking up human jobs in a gig service economy”, said Jack Linzhou Xing, a postdoctoral research fellow at Harvard University.

Pony.ai said its robotaxis were “not intended to ‘replace’ human drivers in a sudden or wholesale way” but to “complement existing mobility ecosystems”. It added that robotaxis could work longer hours and offered quieter, smoother rides.

While analysts say the roll-out will be gradual, drivers have expressed concerns about a future in which they will be competing against robotaxis.

Zeng Liqiang, a driver for Didi’s premium, limousine-like service, argued that self-driving vehicles could not match the level of human service and said some customers were not ready to trust robots on the road.

“Some people wouldn’t dare ride one because the technology still isn’t that mature. But in a few years’ time, who knows?” he said.

For others, the threat was more pressing.

“It’s either them or us,” said a driver who declined to be named. “Every time I see one, I just want to smash it. They are stealing the food right out of our mouths.” FINANCIAL TIMES