Self-driving cars may soon to be a reality in Shanghai. Chinese automaker SAIC along with BMW and Didi Chuxing were the first in China to win approval from regulators to offer robotaxi pilot services in the northwestern Jiading district of the city, a major milestone for Chinese players in the global autonomous driving race.

Why it matters: Shanghai issued China’s first licenses on autonomous vehicle (AV) tests to SAIC and EV maker Nio in March 2018, and is accelerating toward making self-driving vehicle deployment a reality, as other Chinese cities race to catch up.

Baidu’s AV project in Changsha, the capital of central Hunan province, is on track to introduce 100 driverless taxis in the city by year-end. Guangzhou courted Pony.ai by allowing the company to transport its employees and a pool of volunteers in driverless vehicles in the city’s Nansha district beginning in December.

The move comes just days after ride-hailing firm Didi Chuxing and AV startup AutoX unveiled plans to operate robotaxi services in the suburban area as early as the end of the year.

Details: SAIC, Didi Chuxing, and BMW scored China’s first permits from Shanghai regulators to be included in the city’s autonomous vehicle passenger service pilot program at this year’s World Autonomous Vehicle Ecosystem Conference (WAVE) on Monday.

Companies with the licenses are permitted run up to 50 vehicles in the first round of applications and can potentially expand their fleets after six months without incident.

With this round of licenses, self-driving cars are allowed to transport qualified passengers, or “volunteers,” as well as goods for delivery. Prior to this, only company employees involved in testing the vehicles were allowed to ride.

Members of the public are allowed to volunteer for test rides. They are required to be in good health between the ages of 18 and 70. Service providers are required to offer insurance to passengers, according to a regulation released last week by the city government.

Didi told TechNode on Tuesday that passengers in the area will be able to hail rides on a fleet of around 30 robotaxis via its app, a feature that Didi CTO Zhang Bo said earlier this year in a media interview “will soon be rolled out.”

To date, self-driving cars are only allowed to run along 53.6 kilometers of roads in a designated area 65 square kilometers in size, around one-sixth the size of Jiading district.

The test library has been scaled nearly five-fold to 1,580 scenarios including navigating in industrial zones, business centers, residential areas, and subway stations.

A driver is required to be on board in order to take over as needed, and fees are not allowed at this point.

Shanghai also formed an alliance with eastern Jiangsu, Zhejiang, and Anhui provinces to issue China’s first regional permits for vehicle tests to Zhejiang-based automaker Geely and AV startup AllRide.ai, which is headquartered in the Nanjing Municipality, the government said at the event.

The move is expected to reduce the amount of red tape and save on costs for industry players, and therefore boost regional economic development, an official from the Shanghai Municipal Commission of Economy and Informatization said at the conference.

Context: Shanghai has the largest automobile manufacturing output in China, grossing RMB 683.2 billion ($96.7 billion) last year.

Guangzhou ranked second with output worth RMB 548.9 billion, totaling 2.97 million cars produced in 2018. The southern Chinese city is looking to ramp up auto production to 5 million units by 2025.

Jiading district, Shanghai’s automotive hub, aims to grow its annual output to RMB 1.2 trillion by 2025 and increase its influence in the global automotive industry, said Lu Fangzhou, Jiading’s district mayor at the WAVE event. Jiading is home to Chinese largest automaker SAIC and its joint venture with Volkswagen, as well as Volvo’s China headquarters, and Chinese EV maker Nio.

This article was updated to include comments from Didi Chuxing about its app, and to correct the issuing body for the volunteer guideline. It was issued by the city government, not the district.