Uber just made a deal that will boost its self-driving efforts in a big way as well as signal a shift in the way the company operates.
The company announced a partnership with Volvo where it would buy “tens of thousands” of self-driving vehicles from the Swedish automaker, deploying them from 2019-2020. The exact terms of the deal weren’t initially disclosed, but an Uber spokesperson confirmed to Mashable via email that the fleet size will be around 24,000 vehicles. The agreement is worth over $1 billion, according to a Wall Street Journal report.
The agreement marks a bold step forward for Uber, both for its autonomous program and its overall operational strategy. The ride-hailing company has long depended on drivers, which the company treats as independent contractors, to make up its fleet, but the next few years will likely see a flood of Uber-owned driverless vehicles taking the streets.
The new deal expands on a previous alliance between the two companies, which led to Uber’s use of autonomous Volvo XC60 SUVs in its pilot programs in San Francisco (now shuttered to the public) and Arizona. Importantly, Volvo won’t provide fully developed self-driving cars to Uber — the vehicles will come standard with “core autonomous driving technologies,” and Uber will add its own sensors and software after delivery.
Uber’s Volvo deal is a reminder that it’s far and away the biggest player in the ride-ailing industry.
Volvo isn’t the only automaker to team with Uber to add self-driving cars to its fleet. Daimler, the parent company of Mercedes-Benz, has committed to manufacturing autonomous cars for Uber, too. The conditions of that agreement are fundamentally different, however: Daimler’s cars will use its own driverless platform, not Uber’s, and the automaker will own and operate its vehicles on Uber’s network.
The Volvo fleet will give Uber its first opportunity to put its autonomous platform into vehicles at a massive scale, expanding beyond its initial trials. The ride-hailing company doesn’t have plans to manufacture on its own cars, so agreements like this will be essential to scaling up its self-driving operations beyond small regional pilot projects.
The news of the agreement comes after a quiet period for Uber’s autonomous program, as the contentious lawsuit with Google parent Alphabet has advanced. Meanwhile, chief rival Lyft has expanded its public self-driving aspirations, with an ambitious open network for automakers, multiple partnerships for pilot programs, and a new development center to create its own driverless technology platform.
Uber’s Volvo deal, however, is a reminder that it’s far and away the biggest player in the ride-hailing industry. Even though the company’s most recent round of fundraising was uninspiring, it was still valued for $10 billion, about 10 times that of Lyft’s largest round. A massive fleet of 24,000 robotaxis could help to make Uber the first operator to normalize self-driving cars — if the company can stay clear of controversy and actually put them out on the road.