Uber-Volvo deal set to catalyze autonomous vehicle industry expansion

Uber-Volvo deal set to catalyze autonomous vehicle industry expansion

Uber-Volvo deal set to catalyze autonomous vehicle industry expansion

Self-driving vehicles are seen by many people as the obvious future for ride-sharing companies such as Uber, but moving to a driverless model may prove politically hard given that hundreds of thousands or possibly more than a million people drive for Uber on a regular or occasional basis in the US alone.

The deal is the latest development in a long-term alliance between the two firms.

Volvo - which is owned by China's Geely and has yet to build a self-driving system - said in a statement that it would supply Uber with "autonomous driving compatible base vehicles between 2019 and 2021".

He added that the deal with Uber was a "primary example of that strategic direction".

The non-binding framework deal could offer San Francisco-based Uber a way to overcome setbacks at its autonomous driving division in Silicon Valley's race to ideal self-driving systems. "The base vehicles incorporate all necessary safety, redundancy and core autonomous driving technologies that are required for Uber to add its own self-driving technology".

Uber- Volvo XC90 SUV
Volvo to supply tens of thousands of autonomous drive compatible cars to Uber

Niklas Pollard and Heather Somerville writing for Reuters reported that Uber plans to buy up to 24,000 self-driving cars from Volvo, marking the transition of the US firm from an app used to summon a taxi to the owner and operator of a fleet of cars.

This seems like a major acceleration of the push into self-driving cars.

No financial details were disclosed for the purchase, 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.

That software responsibility is a key point, because it means Uber, not Volvo, will assume liability in the event of a collision. Its motive is to sell cars to a company like Uber whose target is to decrease the number of auto owners dramatically.

"We're expecting Japan to be one of the first to allow "level four" automation - where you have the vehicle doing most of the work but still need a human with steering controls in the driving seat".

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