Evolution of technology investment and development of robotaxi services

Using artificial intelligence and autonomous driving technologies, robotaxis are expected to provide more intelligent, efficient, sustainable, and convenient services as technology advances and market penetration increases. This requires attention to technology investment and market competition at the different stages of robotaxi development. This study aims to reveal the changing rules of R&D investment and market competition for robotaxi services at various stages, considering subsidies, passenger preferences (i.e. walking aversion, safety, additional convenience), and the volatility of benefits from congestion reduction. We developed models to capture the competition between robotaxis and traditional taxis in the three phases of market development — namely, introduction, development, and dominance. The results of this study show that the optimal level of R&D investment is affected by factors such as R&D subsidies, passenger preferences, and the volatility of congestion reduction benefits and that it decreases during the development phase and may further decline during the dominance phase. Additionally, government R&D subsidies should be maintained at a reasonable level to avoid potential strategic conflicts with companies in technology investment and adoption of robotaxi services during the introduction phase. The transition from R&D subsidies to usage subsidies will depend on reaching the perceived safety threshold for robotaxi services. Reducing congestion can play a role similar to the deployment of usage subsidies to promote robotaxi services during the development phase, and can promote R&D investment, robotaxi services, and firm profits in the dominance phase. However, these benefits may be reduced by the volatility of congestion reduction. Policy recommendations and strategies are provided to promote future technological progress and market competition.