Uber Agrees Deal with Volvo for 24,000 Driverless Cars

The global taxi company Uber has announced that it’s made a deal with carmaker Volvo to purchase a fleet on 24,000 XC90 SUV’s between 2019 and 2021. The XC90 is currently being used by Uber to test its latest generation of self driving cars.

Volvo said in a statement that Uber will install its own software to the vehicles, which will feature sensors and autonomous driving capabilities. The new deal is estimated to be worth $1.4 billion. The agreed 24,000 vehicle is subject to change, and Uber has still reserved the right to order from other manufacturers to add to its existing fleet.

Uber’s purchase of this new fleet is a step further for its goals of switching to driverless cars. Unlike the existing test vehicles, these XC90’s will include new braking and steering systems which will allow them to operate safely without the need for a human driver, which is one of the biggest costs in an on-demand taxi service.

Jeff Miller, Ubers head of auto alliances said in an interview that “This new agreement puts us on a path toward mass-produced, self-driving vehicles at scale. The more people working on the problem, we’ll get there faster and with better, safer, more reliable systems.”

The XC90 is already being tested by Uber in Arizona, San Francisco and Pittsburgh to test the safety of the software, and ensure any required improvements are made to it before the driverless cars are launched. Uber and Volvo have already joined a mutual arrangement, and both plan to invest money in developing and improving vehicles with automated self driving abilities.

The company has agreed to use 100 XC90’s initially for testing purposes in Pittsburg, although the company has been in talks with Daimler AG’s Mercedez-Benz since the beginning of the year. Both Uber and Mercedez are looking at the possibility of working together to produce autonomous vehicles, but have not given any further information or a timescale for the deal.

Uber’s currently valued at $70 billion, and it’s thought that the deal will not only boost their profits, but also to lower the cost of producing autonomous cars for Volvo. Engineers have been working closely alongside Uber to develop the right base vehicle that will enable driverless technology to work safely. Volvo also plans to sell these cars to its customers.

The company’s rival in driverless technology Waymo has also announced plans to launch a self-driving taxi service to consumers, which is thought to be part of Ubers motives to launch the new cars. No timeline has been provided from either company on timescales and when customers will be able to use the service.