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Startup set to launch China's first commercial autonomous taxi

Beijing backing means vehicles can build safety record on open roads

Lu Qing, WeRide's president and CFO, recently visited Tokyo to attend the Nikkei-sponsored artificial intelligence event, AI/SUM (photo by Hideki Yoshikawa).

TOKYO -- China-based startup WeRide is launching its first commercial autonomous  taxi in Guangzhou and Anqing from July, taking advantage of the country's access to data to try and match similar efforts by U.S. groups such as Google and Uber.

Since last year the self-driving startup has already been carrying out test runs of taxi services with partners including Guangzhou Automobile Group. It currently has about 50 autonomous vehicles driving around the country and is now expanding its operations.

It plans to double the number of its vehicles to 100 by the end of this year and to 500 by next year. The startup, which is backed by the Renault-Nissan-Mitsubishi alliance's venture fund as well as Hong Kong's artificial intelligence unicorn SenseTime, plans to use Nissan Leaf electric cars in the project.

In the U.S., companies such as Google's self-driving unit Waymo, as well as Lyft and Uber already operate commercial autonomous driving cars. "Waymo is one and a half years ahead of us," noted WeRide President Lu Qing, because of the amount of data that Waymo already owns. Waymo's self-driving vehicles had driven 10 million miles on public roads as of October last year. But according to Qing, WeRide will close this data gap in six months, once it has more than a hundred cars running.

Competition in the autonomous driving segment is fierce. It is about the amount of data that the systems run on as much as it is about the algorithms, since hundreds of millions of miles would need to be driven to prove safety, according to a report by think tank Rand Corporation.

The chances that newcomers can catch up with existing players are low. For a self-driving company to be competitive, rather than be taken over by the big players, it needs to have "an intellectual property that is not going to depend on you having a ton of training data," said venture capital investor Fady Yacoub, co-founder of HOF Capital.

Despite the odds, WeRide aims to become one of the winners by focusing on the Chinese market. The company was founded in Silicon Valley, but moved its headquarters to China in late 2017.

"In China, you are able to collect data very quickly," said Qing. This is because, due to support from the government, vehicles can drive practically anywhere. Costs are also lower. To hire a driver in Guangzhou or Anqing is less than a tenth of the cost in San Francisco, he said.

From July, WeRide is launching a smartphone app that shows where a taxi can be picked up. The taxi will be able to take users to popular places such as city center shopping malls. Drivers will be present, but payments will be cashless, via payment apps and credit cards. Fares will be exactly the same as local traditional taxi prices, due to government regulation.

The company aims to remove drivers in two years, using remote control capabilities as a low latency 5G network is rolled out.

The company was founded only two years ago by a team of 20 tech industry veterans, who worked for leading companies such as Baidu's autonomous driving unit and Google. It focuses on 'level four' autonomous driving, which means that the car only needs to be taken back under human control in certain situations such as heavy rain.

Already the largest automotive market in the world, China is expected to be the leading market for autonomous vehicles, according to McKinsey & Company.

Eyeing such opportunities, Chinese tech giants such as Baidu and Tencent have ramped up their partnerships with automakers. Search engine giant Baidu signed an agreement with Sweden's Volvo last year for the development of autonomous vehicles and is testing in designated areas as part of its Apollo project in Beijing. During the Shanghai Auto Show this month, self-driving startup revealed of its test-stage self-driving service, which is available to the company's employees and selected affiliates.

Qing said that WeRide had an advantage over domestic competitors including Baidu, because of the skilled team it gathered in Silicon Valley. The company has about 200 engineers, of whom roughly 50 hold a PhD.

Qing says that "no-one wants to work in a startup without [having a piece of the] equity." Therefore, 20% of the company is owned by the employees through stock options.

When it comes to building different components required for autonomous driving -- from maps to surveillance systems -- it is all about the team and having the right partners, he explained. The company has its own data center and 200 employees processing its data in Anqing. It uses the SenseTime surveillance system and the graphics processing unit of another investor, Nvidia.

The company raised a total of about $150m by last year when it closed a series A funding round. With a next round opening in July, it is looking for strategic investors including another carmaker. The company intends to scale within China on its own, but Qing said that an overseas expansion could happen with the involvement of its partners.

Kaori Yoshida in Tokyo contributed to this report.

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