Thursday, 14 December, 2017

Volvo to sell thousands of self-driving cars to Uber

An exterior view of the headquarters of Uber in San Francisco An exterior view of the headquarters of Uber in San Francisco
Kelvin Reese | 21 November, 2017, 01:03

The non-exclusive agreement enhances the strategic partnership between Volvo Cars and Uber announced in August 2016 and also marks a new chapter in the convergence of vehicle makers and Silicon Valley-based technology companies. It has been working with Uber for almost three years to develop a base vehicle with core autonomous tech, which the ride-sharing company could then customize as it sees fit. Last year, Uber agreed to use 100 XC90s for self-driving tests in Pittsburgh and later struck a deal to include autonomous vehicles from Mercedes-Benz in its network at some point.

Volvo's and Uber's longstanding partnership is an example of automakers and car-service tech firms teaming up to advance self-driving technology to open up what is expected to be a multi-billion-dollar business. The Volvo XC90 is already the base of Uber's current self-driving test vehicle.

Uber announced the Volvo deal Monday, according to The New York Times.

Volvo and Uber expand tie-up in race to dominate self-driving cars

Jeff Miller, Uber's head of auto partnerships said: "In a self-driving world there is no human, so you need redundant steering and braking and actuation systems, such that if there is an electrical or mechanical failure, the back-up system can kick in". Uber's move will definitely boost sales at Volvo's end and also aid in keeping the costs low at the Chinese-controlled group's own plans for 2021 considering fully autonomous cars. Bloomberg points out that these cars start at $46,900 at dealers across the U.S., though it isn't hard to imagine Uber getting some kind of discount for ordering so many at once.

"The automotive industry is being disrupted by technology and Volvo Cars chooses to be an active part of that disruption", Volvo CEO Hakan Samuelsson said.

Uber aims to eventually give driver-free passenger rides, which is the only way such a service would be economically feasible. In addition to Volvo, Uber already has a small fleet of self-driving Ford Fusions. Uber's $70 billion valuation already puts the group nearly on a par with Germany's Daimler.

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