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21 November 2017, 01:12 | Melanie Burgess
Volvo and Uber expand tie-up in race to dominate self-driving cars
That's one of the major revelations from Uber's announcement Monday that the technology company plans to buy up to 24,000 self-driving cars from Volvo, a purchase that marks a significant departure from Uber's exiting business model in which private vehicle owners make up the company's fleet. Uber has worked with third-party components manufacturers to build software and hardware for driverless cars, then worked closely with Volvo to outfit the automaker's XC-90 vehicles with the technology. It would be the first of its kind.
The agreement marks a bold step forward for Uber, both for its autonomous program and its overall operational strategy. Its primary rival, Lyft, just struck a research agreement with Waymo this year, as well as secured deals with Ford, Nutonomy, and Silicon Valley startup Drive.ai to incorporate self-driving cars into its growing fleet.
The purchase highlights the delicate line Uber has been forced to walk as it pursues driverless technology while also trying to keep its current workforce of more than 2 million drivers happy.
The deal builds on a $300 million alliance Volvo announced with Uber a year ago focused on collaborating on the design and financing of cars with self-driving systems, which require different steering and braking features and sensors.
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"It only becomes a commercial business when you can remove that vehicle operator from the equation", Jeff Miller, Uber's head of automotive alliances, told Reuters.
One expert said the announcement "makes a good headline" but had doubts that fully autonomous, driverless Uber rides would be ready to begin until some years later. The agreement calls for the company to supply the ride-hailing firm with base model vehicles that come from the factory with "core" autonomous driving technology installed.
The initiative has faced questions since Alphabet Inc.'s driverless auto division Waymo sued Uber this year, claiming the ride-hailing company stole trade secrets, and since the U.S. Justice Department opened an inquiry into the matter.
Uber is making a significant investment into the driverless vehicles.
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