It may be known for its financial prowess, but now Shanghai is trying its hand in the high-tech realm with plans to take the lead in autonomous driving.

The city has become China’s first to issue licenses to intelligent connected vehicle (ICV) companies, allowing them to pilot autonomous driving projects in real urban scenarios, local government officials announced on Monday during the World Intelligent Connected Vehicles Conference. Such tests are a crucial step before things like commercial robotaxis can go into service.

Car makers SAIC Motor and BMW, as well as the Uber-esque Didi Chuxing, are becoming the first companies to receive such licenses, and will roll out related projects in the city’s Jiading district, the government said.

Licensees can run pilot programs including robotaxis, unmanned delivery or other autonomous driving tasks with special purposes, in designated locations, according to an earlier interim document, which is also the guidance document of the pilot projects. The robotaxis, mostly relying on automation, require a driver present as a precaution and also require that passengers sit in the back seats with seat belts fastened, said the government.

The pilot projects should charge no fees to passengers, and are prohibited from operating commercial businesses, the document said. It added that the licenses will be suspended or cancelled if any test vehicles, during rides with real passengers, violate major traffic regulations or get in severe accidents that cause casualties.

Chinese transport-tech companies are busy preparing to roll out robotaxi projects in a year or two. Supporting polices can accelerate the process by helping vehicles adapt to real road situations, though many netizens doubt whether the projects are practical.

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