The driverless cabs could reduce an average $3-a-mile ride to 90 cents, the firm said.
Initially, the cars will have drivers, ready to take over if the system fails but the plan is to gradually phase the human out in 2019.
The small fleet of six Audi vehicles will travel along a 3.5 mile (5.6km) route in One North, a business district in the city.
By 2019, the plan is to have fully autonomous cars without steering wheels but they will only be tested with a "controlled group of people," according to the firm.
The article makes it clear self-driving taxis should be dramatically cheaper than regular taxis. This alone will make them very appealing to regular people; but they will also likely be safer, more readily available, and cleaner.
This story highlights why any effort to stop self-driving vehicles from replacing millions of American jobs in the near future is likely to fail. Opponents to automating almost all of our vehicles need to win everywhere, but the companies behind self-driving vehicles need to win in just one jurisdiction. If they can prove the concept in just one place while delivering a truly superior product, it will be almost impossible to stop it from spreading.