Baidu kicks off its robotaxi business, after getting the OK to charge fees in Beijing

The Chinese tech giant told CNBC this week that it can start collecting fares for itsrobotaxi service in Beijing on Thursday.

The approval to support robotaxis in China comes as local governments in the U.S. progress in the same direction.

Beijing city's move carries additional weight.

The first time that a large city in China has allowed companies to charge the public for rides is with approval from the capital.

It sets the stage for other cities to do the same, according to the vice president and chief security operation officer at the Intelligent Driving Group at Baidu.

He expects those cities to act later this year or early next year.

Passengers taking one of 67 self-driving cars in Beijing can pay fares from Thursday, thanks to the Apollo unit of Baidu.

The company did not reveal exact pricing, but it did say that fares would be comparable with the premium level ride-hailing charges available through apps like Didi.

On October 13, 2020, a safety staff member gets in a self-drivingrobotaxi in Beijing, China, a few days after Baidu launched trial operations of its Apollo Robotaxi.

Since October 2020, there have been free rides in Yizhuang. The sample fare of 34 yuan was displayed on the app as of Wednesday, for a 3-kilometer ride from a Sam's Club in Yizhuang to a nearby subway station.

The same route costs about two dollars. Didi has a sample premium level fare of 27 yuan.

A number of regular users in Yizhuang have been drawn to the novelty of a free, self-driving taxi. More than 20,000 users take at least 10 rides a month. It is not clear how many will use the service when they have to pay, but Wei wants to get 100robotaxi cars verified each year.

Regulators in the U.S. and China hold the keys to allowing the public to ride on robotaxis.

In the US, self-driving taxi operators like Waymo are testing similar products in California and Arizona. In a part of Phoenix, the public can pay for rides, and the vehicles don't need a safety driver.

The largest single region in China is the Pingshan District of the southern city of Shenzhen, according to the company. The public was allowed to sign up for rides through January. It was not clear if there was a cost to ride.

The town of Yizhuang is home to many businesses, including the headquarters ofJD.com. The region is about half an hour south of Beijing.

The Beijing city government made Yizhuang a testing site for self-drive cars. These include the delivery vehicles of bothJD andBaidu.

Robin Li said last week that the company would expand its Apollo Go service to 100 cities by the year 2030. That is up from five other cities.

The company said its next generation of vehicles would cost half the price of the previous generation. Three electric car makers are associated with the models: a Chinese start-up, Aion, and BAIC Group's Arcfox.

In June, BAIC and Baidu claimed they could make 1,000 self-drive cars for less than 1 million dollars.

After seven years at the helm of a limo company, he joined the Intelligent Driving Group of Baidu. The company has a high-end version of Didi.

He said that the goal of the business is to reduce the cost of self-driving technology and target specific user scenarios.

Rather than fully utilizing lidar technology, which requires costly sensors to create detailed maps before therobotaxi can operate, Wei spoke generally of using algorithms to increase efficient use of hardware.

Apollo would focus on ways to give the user an experience beyond just a mode of transport, such as displaying the streets of Beijing from 20 years ago on the car windows, instead of the current street view.

He said that there are ways to use therobotaxi for non- travel functions, such as a space for medical treatment or a public library.

The development of Apollo is in line with the CEO's attempts to convince investors that the company's future lies in artificial intelligence and related areas.

In the third quarter, the company's fastest area of revenue growth was in "non-online marketing revenue." The growth was attributed to demand for cloud computing.

CNBC's Arjun Kharpal contributed to the report.