When technological advancements intersect with automobiles, robotaxis emerge as a novel concept. Indeed, Tesla has teased a robotaxi as a cost-effective alternative to buying a regular car. At the same time, Toyota has collaborated with Pony.ai to build electric vehicles (EVs) using autonomous driving technology and ride-hailing services in China. The landscape of robotaxi appears bright, which can substantially benefit civilians, businesses, and communities on a whole.
What is a robotaxi?
A robotaxi, or a self-driving taxi, is equipped with sensors, cameras, and navigation systems to travel on public roads with little to no human intervention. Utilizing sophisticated software, it can identify and steer clear of obstacles, alleviate traffic, and offer passengers a quicker and more convenient transportation option.
What drives the growth of robotaxi?
Technological advancements
The rise of robotaxis can be attributed to technological advancements. Innovations such as the Internet of Things (IoT), data analytics, artificial intelligence, and cloud computing have created a connected environment in cities, which offers various solutions to transform urban mobility. Various industries, including automotive, technology, mobility startups, and original equipment manufacturers (OEMs), have made significant investments in digitalizing mobility and developing new technologies.
Big Tech competition
"Big Tech" companies have entered the robotaxi market and are competing with traditional car manufacturers through research and large investments. For example, Waymo, a self-driving car company founded by Google, now provides a taxi service. The company has collaborated with Fiat Chrysler to automate the Chrysler Pacifica Hybrid minivan and launched the first fully electric self-driving SUV, the Jaguar I-PACE. Amazon is also making significant investments in its self-driving service, Zoox. Initially, Zoox was only tested for employee commuting. However, in February 2023, it conducted its first public road test in Foster City, California, with an autonomous vehicle.
The need for AV among consumers
Autonomous driving (AD) technologies are expected to impact the future of the automotive industry significantly. This could create a multibillion-dollar opportunity for companies involved in the mobility ecosystem. According to research by Lehtonen et al. (2022), consumers are inclined to switch to autonomous vehicles due to the desire to engage in leisure activities during automated driving and the usefulness of the integrated system. For this reason, a study by McKinsey found that 51% of car buyers can envision themselves switching to a fully autonomous vehicle in the future.
In the context of robotaxis, one of the primary reasons for their adoption is their affordability. For instance, in China, the mass implementation of self-driving taxis has significantly reduced costs. While a human-driven taxi ride typically starts at 18 yuan ($2.48), the base fares for driverless taxis are as low as 4 yuan (55 cents). This substantial price difference has encouraged individuals without their own vehicles to opt for autonomous vehicle-based mobility services and replace traditional car journeys. Notably, around 45% of citizens without regular access to cars prefer using robotaxis over public transport, and 25% choose them over conventional taxis.
Steering the wheel of urbanization
The emergence of robo-taxis is spurring the beginning of new business models and revenue streams in the transportation industry. From fleet management and maintenance services to data analytics and advertising, the robo-taxi ecosystem offers numerous opportunities for innovation and entrepreneurship. 
For example, Tesla has introduced a robotaxi initiative to reduce traffic congestion and significantly lower carbon emissions. With advanced self-driving capabilities, Tesla intends to integrate these autonomous vehicles into existing transportation networks. This approach is designed to optimize the use of Tesla models and decrease the number of cars on the road. The concept is based on the idea that shared autonomous vehicles can fulfill the transportation needs of more people while using fewer resources and operating under active driver supervision to ensure safety. Tesla robotaxis are expected to alleviate urban traffic and contribute to a greener environment by reducing emissions from traditional combustion engine vehicles. The efficiency and reliability of Tesla’s robotaxi services may offer an alternative to personal car ownership, encouraging a shift towards shared mobility solutions.
Enhanced mobility with equal access to transportation
Robotaxi has the potential to enhance accessibility for individuals with disabilities, the elderly, and underserved communities by reducing barriers to mobility and increasing social inclusion. For example, in Detroit, May Mobility - an autonomous vehicle manufacturer in the US - has initiated a robotaxi pilot program specifically aimed at people with disabilities aged 62 and older. As part of this program, three robotaxis will be deployed, two of which are wheelchair-accessible, to assist participants in gaining easier access to healthcare facilities, shopping centers, job opportunities, and social and recreational activities.
While all of May Mobility’s robotaxis operate autonomously, they are equipped with human safety drivers who provide customer service and oversee vehicle operations. May Mobility’s autonomous vehicles use its Multi-Policy Decision Making (MPDM) technology to navigate city streets. Each vehicle is equipped with multiple lidar, radar, and cameras that feed MPDM a 360-degree view of its surroundings. Using the data collected from the AV’s sensor suite, MPDM can simulate thousands of possible scenarios every second. As the AV detects vehicles, pedestrians, bikers, and pets, MPDM can help civilians safely reach their destination.
Making robotaxi a reality - A long way to go
Despite its potential to transform the urban landscape, robotaxi is in its early stages and has a long way to go before it becomes commonplace. For robo-taxis to operate at scale, supporting infrastructure (such as charging stations and communication networks) must be developed. It is also crucial to prioritize the safety of autonomous vehicles and establish liability frameworks in the event of accidents or malfunctions to maintain the safety of all individuals.
Besides, the automotive industry’s hesitation towards robotaxi adoption largely stems from the fear of job displacement. Taxi drivers are among those who might be directly impacted as robotaxis and other autonomous vehicles could replace their roles. Supporting industries, such as vehicle maintenance might experience major shifts as the demand for human-operated vehicles decreases. Thus, policymakers should ensure there are measures in place to support workers transitioning to new roles before fully embracing robotaxi technology.
