Uber plans to buy 24000 self-driving cars from Volvo

In a move that has stunned the market Uber has ordered 24,000 self-driving cars from Volvo. File

In a move that has stunned the market Uber has ordered 24,000 self-driving cars from Volvo. File

Volvo engineers have been working closely with Uber to develop a base vehicle with core driverless technology that the ride-hailing company can then augment.

A Volvo statement said the framework for the deal calls for "tens of thousands" of XC90 coupes to be outfitted for autonomous driving in Sweden and sold to Uber.

Uber and Volvo are taking a major step toward putting driverless cars on the road.

Uber and Volvo have not disclosed financial terms, but have confirmed that the deal is "non-exclusive" - meaning both are free to form similar partnerships with others.

Jeff Miller, Uber's head of auto partnerships said: "In a self-driving world there is no human, so you need redundant steering and braking and actuation systems, such that if there is an electrical or mechanical failure, the back-up system can kick in".

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Without the cost of having to pay a driver, self-driving taxis are expected to cost significantly less than traditional taxi and Uber rides. Uber is already testing the XC90 in Arizona, San Francisco and Pittsburgh in trials with safety drivers on board to help refine and improve their software.

The agreement envisages that the pick-up service will purchase the vehicles over the course of three years beginning in 2019.

From automakers like Ford, Tesla and General Motors to technology companies like Google, Uber and Lyft, titans of the transportation industry are racing to gain an edge in a future of autonomous vehicles. Uber's US$70 billion valuation already puts the group nearly on a par with Mercedes-Benz parent company Daimler.

The agreement is part of automaker's mission "to be the supplier of choice for AD ride-sharing service providers globally", said Håkan Samuelsson, Volvo's president and CEO.

Uber just made a deal that will boost its self-driving efforts in a big way as well as signal a shift in the way the company operates.

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