Volvo to sell 24,000 self-driving cars to Uber. This a big move made by Uber, marking the transition of the U.S. firm from an app used to summon a taxi to the owner and operator of a fleet of cars.
This deal could offer San Francisco-based Uber a way to overcome setbacks at its autonomous driving division in Silicon Valley’s race to perfect self-driving systems.
Combining Volvo’s cars with Uber’s self-driving system builds on their nearly three-year relationship and comes as Uber’s autonomous driving unit has been hit by a lawsuit over trade secrets and the departure of top talent.
Automakers, ride-hailing firms and tech startups have been forging loose alliances in an effort to advance self-driving technology and claim a piece of what is expected to be a multi-billion-dollar business.
Volvo said in a statement that it would provide Uber with its flagship XC90 SUVs equipped with autonomous technology as part of a non-exclusive deal from 2019 to 2021. A Volvo spokesman said it covered up to 24,000 cars.
The self-driving system that would be used in the Volvo cars — which have yet to be built — is under development by Uber’s Advanced Technologies Group.
This would be Volvo’s largest order by far and the biggest sale in the autonomous vehicle industry, giving Uber, which is losing more than $600 million a quarter, its first commercial fleet of cars.
Jeff Miller, Uber’s head of automotive alliances said in a statement, “Our goal was from day one to make investments into a vehicle that could be manufactured at scale.”
The cars would be available through the Uber app to pick up passengers without a driver. “It only becomes a commercial business when you can remove that vehicle operator from the equation,” Miller added.
There are no financial details available of the deal, which would be a massive new investment for Uber and mark a change from Uber’s long-standing business model where contractor drivers buy or lease and maintain their own cars.
The deal builds on a $300 million alliance Volvo announced with Uber ovr the last year focussed on collaborating on the design and financing of cars with self-driving systems, which require different steering and braking features and sensors.
Volvo Cars CEO Hakan Samuelsson said in an interview, “We get support developing this car,” adding that, “It’s also a big commercial deal.”
