Volvo supplies Uber with Robotaxis

Over the past few weeks I have discussed several topics surrounding autonomous vehicles and over the years have discussed Uber’s plans to take control of the logistics market whilst at the same time reduce their costs and dependency on humans.

Last November, Uber and Volvo came to an agreement that would see 24,000 Volvo XC90 SUVs join the Uber fleet as autonomous ride sharing cars. Volvo want to dominate this market and this deal which will start in 2019 and run for a couple of years will see them take a good stake in the supplier network surrounding ride-sharing cars. Remember that General Motors acquired Cruise Automation and has a tie up with Lyft, one of Uber’s main competitors.

Volvo call these cars “robotaxis” and are using a new marketing name for the simple taxi service: “ride-hailing”. Uber was born for the purpose of ride-sharing, in other words, a driver was travelling from A to B and shared their car with other like-minded people. They then morphed into more taxi services with drivers cruising the streets looking for someone to share the ride to that persons destination! With a robotaxi, there is no-one to share the ride, so it becomes an automated taxi service.

However, Volvo and Uber are trying to distance themselves from taxi companies by refocusing the name of the service, despite it being identical. Volvo say that the two reasons Uber selected them were safety and speed. Safety, because Volvo’s have had a focus on safety for decades and the speed is relative to time to market. The XC90 , like other models in the fleet are based on what Volvo call “SPA” – a scaleable product architecture and they describe this as a very advanced electrical architecture which means that they can add in many systems very easily – something that has to happen for any level of automation.

Volvo have already supplied 100 cars to Uber for a Pittsburgh based autonomous trial and both parties have said that the new deal is very lucrative. The first cars are being built in Sweden and then production (certainly for the US market) will be transferred to their South Carolina plant. One of the earlier cars being tested was involved in a high profile accident when it was involved in a collision. It was only high profile because the car was in autonomous mode, although the at-fault driver was a human who failed to stop at a junction and whacked the Volvo hard enough to flip it on its side.

The agreement with Uber should also speed up the development of the Volvo autonomous fleet so it can compete with the big manufacturing groups. Volvo also intend to take on Tesla head-to-head with an $11b injection of cash from Geely when they bought the marque. Tesla are clearly nervous because they are attempting to destroy Volvo’s safety rating compared to their cars. Often when you see a company name their competitor in their advertising, it means they are struggling against them. On a side note, it appears that Tesla released their new Roadster recently to boost cash flows by getting buyers to put down large deposits today for a 2020 delivery. The Model 3 production issues are badly hurting them at the moment and they desperately need the money.

With Uber being savaged by the courts in many cities for their workplace agreements with the drivers and their battles with many Government protected taxi services, it is clear that they would prefer to get rid of the humans as much as possible. Expect to see more battles between the established taxi companies and the dehumanised Uber – and expect to see some taxi drivers retaliate physically to nobble the competition.