China’s internet giants – Baidu, Alibaba and Tencent, or the BATs – are spending heavily on driverless car start-ups, and there are several factors that may give them a leg up on the foreign competition.
Though yesterday’s news that an autonomous Uber car killed a pedestrian has thrown some cold water on the prospect of self-driving autos hitting the sales room floor anytime soon, the fact that the technology is a long way off was no secret. What is intriguing about the possibilities in China, no matter how long it will take, is that the roads, wireless infrastructure and signaling system can be built from scratch in a way not possible in more developed countries.
The profile of China’s consumer may also offer opportunities for the BATs to do something besides just help a passenger with the driving. Cars could become not just transportation, but an “on-ramp into [internet companies’] ecosystems.”
That’s what Bill Russo, an ex-Chrysler executive who now runs a consultancy in Shanghai, told The Wall Street Journal. “So they’re all actively investing in mobility… This is a game that’s not happening anywhere else. It’s what makes China so unique,” he explained.
Part of this idea is to convert cars into a time-sharing service as the primary market rather than ownership. That makes sense in a country where car ownership is low to begin with, most people don’t need a car to commute, and partial ownership may be more attractive.
Autos are turning into a “mobile living space,” said William Li, founder of electric car start-up NIO. In a country where commuting has become one of the main drags on quality of life, passengers are an ideal audience for internet services, which explains the BATs’ interest in cars as a platform for everything from online shopping to video games.
“In future commutes, you won’t have to focus much on driving anymore,” Baidu Chief Executive Robin Li said on the sidelines session in Beijing this week. “You’ll be able to have hot pot and sing karaoke on the ride.”
It is more rational to think that driverless cars fits the various business models of shared mobility more than private ownership mobility models, at least at initial stage. That is not unique to China, although China does enjoy the most promising overall environment that could support the earliest realization of this new technology.
The profit opportunity is just much greater for Uber or Didi to provide their services without having to pay the drivers. This is why Uber is right there at the forefront of testing driverless cars. A few accidents will not stop that.