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Uber and Volvo commit $300 million to developing autonomous cars together

Uber users in Pittsburgh will be able to hail semi-autonomous Volvos by the end of August.

Volvo Cars And Avicii Feeling Good About The Future Michael Kovac / Getty

Uber has struck a deal with Volvo to develop fully autonomous vehicles. As part of the partnership, Volvo and Uber will contribute $300 million to the project with Uber making 100 of Volvo’s newest semi-autonomous vehicles available to its Pittsburgh customers by the end of August.

The partnership isn’t exclusive — Uber is also working with Toyota and can pursue additional automotive partnerships — but it also stipulates that Uber will buy Volvo’s “base vehicles,” which the ride-hail company can retrofit with its own autonomous technology.

Volvo, which Ford sold to China’s Geely Holding in 2010, will also be building out its own autonomous technology using that same base vehicle — the next generation of which will be fully autonomous.

While this partnership — and the deadline for its launch — makes Uber the first company to ship an on-demand network of at least partially self-driving vehicles, it also may help Volvo in its own self-driving efforts.

The data Volvo gleans from the partnership could be used to inform Volvo’s fully autonomous technology. Recode has reached out to Volvo to determine whether the automaker has access to that data once it sells the base vehicles to Uber.

If so, it’s not the only source of “miles” or so-called experiential data the automaker will have access to. As part of its own pilot, called “Drive Me,” Volvo will be handing out 100 XC90s with the latest autonomous technology the company has developed to be tested on the roads of Sweden.

Separately, Uber has also acquired self-driving truck startup Otto. Otto, which is just a few months old, was founded by Google veterans Anthony Levandowski, Lior Ron, Don Burnette and Claire Delaunay. As part of the acquisition, Levandowski will take over all of Uber’s self-driving efforts, including Otto.

The terms of the deal are not yet confirmed, though Bloomberg Businessweek earlier reported the company was acquired for about $680 million, and its employees will receive 20 percent of the profits from Uber’s commercial trucking business.

The acquisition marks Uber’s foray into on-demand trucking and doubles down on its delivery efforts. Previously, Uber’s investment in on-demand delivery only extended to food and small items.

“Together with Uber, we will create the future of commercial transportation: First, self-driving trucks that provide drivers unprecedented levels of safety; and second, a platform that matches drivers with the right load wherever they are,” Otto wrote in an announcement.

But while the focus of the collaboration may be on matching drivers with freight, the information the companies retrieve from that will be used to eventually and completely replace those drivers with self-driving technology. And Otto is well on its way, technically speaking. While regulations on how and when self-driving technology can be implemented en masse on public roads have yet to be implemented, Otto has already begun to test several of its self-driving “kits” in trucks on highways around San Francisco.

Uber also intends to use Otto’s kits to retrofit passenger vehicles such as Volvo’s and those of other automakers the ride-hail giant may partner with.

Together, these investments put Uber ahead of many of its competitors — including Google — in terms of the commercial viability of its self-driving technology. Google, which recently lost its chief technologist Chris Urmson, has yet to publicly announce a path to revenue for its self-driving car project. Several sources say this has been a cause of internal frustration among employees as well as executives.

As of yet, Google’s self-driving cars are prototypes. Tesla, which may have been the first to ship semi-autonomous technology, also has plans for a shared network of self-driving cars. But it’s unlikely the network will be financially viable without a partner like Uber or Lyft.

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