Uber and Volvo have extended their strategic partnership, with the Swedish automaker agreeing to supply tens of thousands of base vehicles to the ride-sharing platform between 2019 and 2021.
The new non-exclusive agreement between Volvo Cars and Uber extends a working relationship that has been in place since August 2016.
Uber is currently testing driverless vehicles in Tempe, Arizona and Pittsburgh, Pennsylvania. Among that fleet is a range of customized Volvo vehicles, as well as cars from manufacturers such as Ford.
The on-demand car service is combining Volvo’s self-drive hardware with proprietary artificial intelligence technologies. It’s expected that testing will ramp up following an estimated investment of close to $1.4bn on Volvo’s 24,000 XC90 sports utility vehicles, according to the Financial Times.
Age of disruption
“The automotive industry is being disrupted by technology and Volvo Cars chooses to be an active part of that disruption,” said Håkan Samuelsson, Volvo Cars president and chief executive.
“Our aim is to be the supplier of choice for AD [autonomous driving] ride-sharing service providers globally. Today’s agreement with Uber is a primary example of that strategic direction.”
“We’re thrilled to expand our partnership with Volvo,” said Jeff Miller, head of auto alliances at Uber. “This new agreement puts us on a path towards mass produced self-driving vehicles at scale.”
Hurdles on the horizon for Uber
Aside from Uber’s licensing issues in major cities such as London, a court case at the end of 2017 could also have a bearing on the company’s ambitions in the driverless vehicle business.
A legal dispute with Waymo, a technology company owned by Google parent Alphabet, has arisen after the start-up claimed that Uber stole trade secrets to further its autonomous vehicle push. Waymo is seeking an estimated $1.9bn in damages and the case will be heard in court at the start of December.
And there are plenty of competitors seeking to perfect driverless technology. Among them are Ford, BMW, Google and Uber’s partner in this particular venture, Volvo.
At the same time as providing Uber with base vehicles, Volvo will use the same platform as part of its continuing autonomous car strategy. The manufacturer plans to release its first fully autonomous car in 2021.