Uber has become the latest company to take a big step towards an expected future of driverless cars with an announcement that it had agreed to buy as many as 24,000 autonomous vehicles from Volvo starting as soon as 2019, after the technology is perfected.
The deal, announced Monday, shows just how serious Uber is about expanding beyond its ride-sharing app to own and operate its own fleet of driverless vehicles. The self-driving technology that will eventually be installed in those Volvo cars is being developed through Uber’s Advanced Technologies Group, in Pittsburgh.
Jeff Miller, Uber’s head of automotive alliances, told Fortune in an interview that Monday’s announcement represented “the logical conclusion” of the company’s ongoing partnership with Volvo. Uber agreed to a $300 million partnership with the Swedish carmaker (owned by China’s Geely) in 2016 to develop self-driving car technology for Volvo’s flagship luxury SUV, the XC90, with plans to eventually buy those vehicles from Volvo and incorporate them into Uber’s ride-hailing service.
“We always knew our goal was not just to build the tech, but to have a clear path to doing it and deploying it at scale,” Miller said. “And, for that, you need a clear manufacturing strategy.”
Miller declined to speculate about when, exactly, Uber expects to actually roll out a fleet of driverless vehicles for ferrying passengers. “We’re moving as aggressively as we can,” he said, adding that the technology needs to reach a point where it is safe enough to be deployed on a large scale. “We have to be at a point where the technology is ready and it’s safe and we feel very good about deploying it without a safety driver,” Miller said.
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Of course, a lot could happen between now and 2019, which is why Uber and Volvo built flexibility into Monday’s announcement. Miller said the companies will refine the 24,000 number over the coming years, and that Uber may end up buying more vehicles from Volvo, or less, depending on how the technology progresses as well as the regulatory environment. (The car purchases are expected to happen between 2019 and 2021, the companies said.)
When it comes to how self-driving vehicle rules, Miller said Uber is optimistic that regulations will not slow down technological advancement. “The reason I’m optimistic is this technology is fundamentally about saving lives and making out transportation system better for everybody,” he told Fortune. “There should be an onus on us to demonstrate that these are safer than the alternative, and when you can do that, the [regulations] will follow, because it’s just better for everybody.”
Of course, Uber also has to think about its competition, such as ride-hailing rival Lyft, which has its own partnership with Alphabet’s self-driving unit Waymo (Waymo is currently locked in a $2.6 billion lawsuit with Uber over theft of trade secrets). Lyft also has partnerships with Ford Motor as well as startups Nutonomy and Drive.ai to develop driverless vehicles.
In fact, it’s difficult to find a major automaker that isn’t partnering with a tech company or exploring its own version of self-driving vehicle technology. Uber has also partnered with Daimler on a deal that would see the German automaker develop its own driverless cars that Uber would operate (under Daimler’s ownership).
“I think it’s great that there are so many people out there in the ecosystem who are chasing this hard problem,” Miller said of Uber’s competition in using driverless vehicles. “Once it gets solved, our world is going to be a much safer, better place to navigate around our cities.”
