Swedish car maker Volvo Car Group has agreed to supply Uber with cars for use in the company's planned autonomous car ride-hailing service. According to Volvo's Nov. 20 announcement, the car company will sell tens of thousands of autonomous driving compatible base vehicles from 2019 to 2021. The two companies have been working together in tests in Pittsburgh, San Francisco and Phoenix for the last few years.
The Volvo announcement said the agreement is non-exclusive, meaning that both Uber and Volvo could find other partners with whom to work in similar applications. According to a Volvo spokesperson, Volvo will use the same base cars for the development of its own autonomous car strategy, with the first fully autonomous car from Volvo expected to be released in 2021.
"This deal builds off our existing partnership to develop self-driving vehicles," an Uber spokesperson told eWEEK. "In our nearly two years of working together, we have built a sizable fleet of prototype vehicles on the Volvo XC90 platform. While these vehicles were produced to test new software and hardware, they were not built for scale manufacturing or true autonomy (removing the driver completely).
"Our new agreement allows Uber to order tens of thousands of vehicles for purpose of fully autonomous vehicle production (vehicles capable of operating without a human in the front seat)."
'Tens of Thousands' of Autonomous Cars in the Deal
The spokesperson said that the number of 24,000 vehicles being quoted elsewhere in the media was not accurate. "The 24,000 number is a range, not a purchase order number," the spokesperson said. "It could easily be more or less vehicles, but it gives us a general framework to go from." She added that it was more accurate to simply say "tens of thousands."
Despite the lack of a specific number, the agreement between Uber and Volvo is extremely important to the autonomous vehicle industry because the industry needs a major commitment to give it the assurance that the business will continue. Similar milestones were achieved by Tesla when that company introduced a radically new fully electric tractor-trailer, which immediately generated orders for a few hundred trucks from major delivery companies and others, including Walmart.
"This deal puts us on the path toward mass-produced self-driving vehicles at scale (aka "series production" in automotive space)," the Uber spokesperson said. "And it'll allow us to roll out AVs at scale and provides us sufficient flexibility to begin scaling production when our tech is ready. While this agreement is for scaled production vehicles, the teams continue to collaborate and make progress together, as seen with our first-, and soon second-, generation rollouts."
Volvo and Uber have already built and completed more than 200 of the first-generation autonomous vehicles that have been used in testing. The development of second generation vehicles will lead directly to the vehicles that Uber has agreed to buy from Volvo. Perhaps more importantly, the Uber Volvos will lead directly to mass production of autonomous cars that can be used for more than just Uber's ride-hailing business.
Will We See Mercedes Benz Ubers?
This direction isn't lost on other car makers and other industries. For example, Uber and Mercedes Benz have agreed to cooperate in bringing that company's self-driving cars to Uber's network. Interestingly, Mercedes Benz is the company that pioneered autonomous vehicles decades before anyone else, having successfully tested an autonomous S-Class car on the highways near Paris in 1994.
Uber isn't alone, of course. Alphabet's Waymo has announced that it has begun production of a group of autonomous Chrysler Pacifica hybrid minivans that will be running on the streets of Phoenix, Ariz. The company is already advertising for potential riders in the Phoenix area. The minivans are the result of a deal between Alphabet and FCA, which is Chrysler's corporate owner.
Meanwhile, Uber's competitor in the ride-hailing business, Lyft, isn't being left behind. Unlike Uber, Lyft isn't planning to own its own cars; instead, it will work with other companies that produce self-driving cars in its effort to enter the market. Lyft's approach eliminates the need for the level of capital investment that Uber plans for its cars and it allows the company to work with whatever partner is producing the results it wants. One of Lyft's partners is Waymo.
The fact that there are a lot of companies developing self-driving cars is important because it means that there's a better chance of developing the technology in a way that will ensure a meaningful future. That's something that no single company can do alone.
Large-Scale Production Will Prove Important
But being able to produce self-driving cars on a meaningful scale is also critical. The technology industry has a long history of interesting developments that never really went anywhere until they were adopted for large-scale production. A classic example is the Xerox Star computer that pioneered the graphical user interface, including the use of a mouse. But it never caught on until Steve Jobs co-founded NeXT, which was followed by the Apple Lisa, which then led to the Macintosh.
It was the Macintosh that led to widespread use of the GUI that we all know today and it took the large-scale production of that computer to make it part of everyday life.
Likewise, it will take those thousands of cars planned by Uber, and likely thousands more that follow from whatever company is next, to create the wide scale use of autonomous vehicles. But the Uber agreement to buy thousands of Volvos is a critical next step.