By Amir Nasr
August 18, 2016 at 3:20 pm ET
Uber Technologies Inc. expanded its push to develop self-driving cars on Thursday, announcing its acquisition of driverless truck firm Ottomotto LLC and a partnership with Volvo Cars, making Uber the latest U.S. company to accelerate the race toward offering a ride-sharing service powered by self-driving cars.
Uber and Volvo will contribute a total of $300 million for a joint project that will develop “base vehicles,” eventually leading up to fully autonomous vehicles. A Volvo spokesman told Morning Consult that the $300 million would be evenly split between the two companies.
Under the agreement, the Swedish manufacturer will build the cars and Uber will buy them.
“Partnership is crucial to our self-driving strategy because Uber has no experience making cars,” Uber Chief Executive and Co-Founder Travis Kalanick wrote today in a blog post. “By combining Uber’s self-driving technology with Volvo’s state-of-the art vehicles and safety technology, we’ll get to the future faster than going it alone.”
Volvo has already been working toward building a fleet of fully autonomous cars. The company says 100 models of its self-driving vehicles will be on public roads in Sweden by 2017, which the company says is the world’s first “large-scale autonomous drive project.”
Today’s announcement comes as other U.S. firms beef up their autonomous ride-sharing research and development. Ford Motor Co. on Tuesday said it plans to have fully autonomous vehicles in operation in a “ride-hailing or ride-sharing service” by 2021. In January, General Motors Co. and Lyft announced a partnership to build “an integrated network of on-demand autonomous vehicles in the U.S.” GM invested $500 million into Lyft in that agreement.
It’s part of a growing trend that will see more automobile manufacturers and tech firms move toward autonomous technologies, according to Joe Colangelo, president of Consumers’ Research.
“GM, Volvo, Lyft, and Uber don’t have any monopoly on driverless technologies,” Colangelo said in an email. “I expect that many more automotive and technology companies will be making large investments in driverless tech as well as ride-sharing software. This competitive landscape is terrific for the American consumer, who will benefit from increased efficiency and decreased cost.”
Daniel Castro, vice president at the Washington-based Information Technology and Innovation Foundation, called the Uber-Volvo partnership a “positive development” that shows “there is healthy competition between competitors in the race to develop autonomous vehicles.”
“What is perhaps most interesting here is that there is both exciting product development as well as business model innovation,” Castro wrote in an email to Morning Consult. “So companies are not just trying to compete to design the safest autonomous (or semi-autonomous) vehicle, they are trying to create the best transportation experience.”
Castro compared the burgeoning field to portable music players, noting that while MP3 players first hit the consumer market in the late 1990s, it was with the advent of Apple Inc.’s iPod and iTunes in 2001 that “suddenly portable media changed forever.”
A Morning Consult poll of registered voters last month found that 55 percent of voters said they wouldn’t drive in an autonomous car, compared to 27 percent who said they would. Voters reported concern over several potential issues with self-driving cars including glitches, personal privacy of GPS data and the obstacles human-driven cars would present for driverless ones.
“Even if American consumers don’t purchase self-driving cars, they will experience the impacts of driverless technology through reduced costs of goods they buy at the store and automotive transportation they consume, whether through ride-sharing or otherwise,” Colangelo said.
Consumer advocacy groups Consumer Watchdog and the Center For Auto Safety have raised concerns over the deployment of self-driving technology and has called on the White House to slow its push to assimilating driverless cars onto U.S. roads.
Uber’s other major business announcement on Thursday involved its acquisition of the driverless trucking firm known as Otto. That company’s co-founder, Anthony Levandowski, will lead Uber’s self-driving efforts in San Francisco, Pittsburgh and Palo Alto, Calif.
Levandowski is considered a pioneer in the self-driving technologies field and was one of the engineers behind “Ghostrider,” an autonomous motorcycle currently owned by the Smithsonian.
Kalanick called the companies’ pairing a “dream team,” touting their strong autonomous engineering team as well as “self-driving trucks and cars that are already on the road thanks to Otto and Uber’s Advanced Technologies Center in Pittsburgh.”
Will Rinehart, director of technology and innovation policy at the American Action Forum, said the strength of each firm complements the other’s.
“Otto is working to put autonomous technology into long-haul trucks,” Rinehart wrote in an email to Morning Consult. “Uber has deployed its technology into cities and urban areas. Merging the highway efforts with urban efforts could make autonomous vehicles a reality.”
He added that comparing the partnerships forged by Uber and Lyft in the autonomous field is difficult. While Lyft received more cash from GM, Uber has the larger “existing customer base,” Rinehart said, adding that Uber’s acquisition of talent from Otto could also factor into eventual dividends.