The Reasons That the Uber-Volvo Self-Driving Car Alliance Makes Good Strategic Sense

Clever strategic move for both. Volvo has long been known for its technology, especially regarding safety which will be a crucial factor in winning both regulatory approval and customer interest. But it was fading as a global competitor.

Uber gets a smaller partner with great reputation but of limited financial strength who will thus be more pliable, at least where it comes to promoting Uber's globally competitive interests. And the decision to produce kits rather than cars means that the Uber-Volvo technology can be retrofitted on to many vehicles, especially those of the big manufacturers who are, themselves, trying desperately to come up with their own self-driving technology, giving the Uber-Volvo team an insidious - and potentially dominant - entree into the market. JL

Jonathan Gitlin reports in ars technica:

Uber and Volvo announced plans to partner on a $300 million program to develop fully autonomous vehicles by 2021. Volvo is a leader in vehicle development and best-in-class when it comes to safety. Uber has been interested in ditching the human element for some time. Uber doesn't plan to build its own self-driving cars; rather it will produce kits that can be installed on other vehicles.
On Monday, the Ford Motor Company made news with the announcement that it will build a fleet of self-driving ride-share vehicles. Whether or not that news had any impact at Uber is unknown, but Uber and Volvo announced plans to partner on a $300 million program to develop fully autonomous vehicles by 2021, a year that now promises plenty of self-driving vehicles (we're expecting one from BMW as well).
"Volvo is one of the most progressive and contemporary car makers in the world. It is a world leader in the development of active safety and autonomous drive technology and possesses an unrivaled safety credibility. We are very proud to be the partner of choice for Uber, one of the world’s leading technology companies. This alliance places Volvo at the heart of the current technological revolution in the automotive industry," said Håkan Samuelsson, Volvo CEO.
Uber's boss, Travis Kalanick, was similarly upbeat: "Over one million people die in car accidents every year. These are tragedies that self-driving technology can help solve, but we can’t do this alone. That’s why our partnership with a great manufacturer like Volvo is so important. Volvo is a leader in vehicle development and best-in-class when it comes to safety. By combining the capabilities of Uber and Volvo we will get to the future faster, together."
Bloomberg reports that by the end of summer, the people of Pittsburgh will be able to catch a ride in one of Uber's new self-driving vehicles—specially modified Volvo XC90 SUVs. By the end of the year, Uber will have taken delivery of 100 XC90s. Uber doesn't plan to build its own self-driving cars; rather it will produce kits that can be installed on other vehicles, a similar plan to comma.ai (George Hotz's startup). Indeed, Uber recently announced plans to buy Otto, a startup that's developing a similar kit for trucks.
Uber has been highly interested in ditching the human element for some time. It was in talks with Google to use the latter's autonomous tech, although that ended in 2015. The company also funded robotics research at Carnegie Mellon University as part of a "research pact," which stalled after it poached most of the researchers. Those researchers now work at Uber's Advanced Technology Center in Pittsburgh, which has been testing autonomous Ford Fusion hybrids in the city.
That was unlucky for Carnegie Mellon, but probably a wise move for Uber. General Motors is investing $500 million in Lyft—Uber's biggest rival—which plans to start offering autonomous services using the forthcoming Chevrolet Bolt electric vehicle. And as we heard on Monday, Ford also plans to enter the ride-sharing market before too long.
Back in Pittsburgh, Uber customers might soon find their ride drives itself, although there will be a human operator in the driver's seat for now. What's more, rides in the self-driving XC90s will be free for the time being.