Uber buys 24,000 Volvo XC90s … and this time, it’s not a rumor
In March 2016, a German magazine sparked rumors that Uber had bought no less than one hundred thousand S-Class Mercedes capable of adapting to autonomous driving commissioned from Daimler, news that was quickly denied by both companies. In July 2015, there were rumors that a member of Tesla’s board had leaked that the company had closed a deal to buy half a million Volvo self-driving vehicles in 2020, news that sounded so incredible the company didn’t bother to deny it.
This time, however, everything indicates that Uber is ready to take the step of acquiring its own fleet: it has agreed to acquire up to 24,000 Volvo XC90s between 2019 and 2021 for its fleet of autonomous vehicles in a non-exclusive agreement that suggests the two companies will continue working on autonomous driving technology for more than three years. Volvo has confirmed the news on its website: a huge boost for the brand and for the future of the robotaxi, and that Uber will finance partly with capital and partly with debt.
For Uber, valued by its shareholders at around $70 billion dollars, the agreement means moving to running a huge fleet, as opposed to simply being a service company that operates third-party vehicles. A radical change in the structure of the company, which moves from being a technological company to a transport company, a view long held by some courts around the world. In January, Uber closed another non-exclusive agreement with Daimler of a very different nature: Daimler would continue developing its own autonomous driving technology and maintain the ownership of its cars, while Uber would manage the passenger transport service.
The problem for Uber? That autonomous driving, which cuts out labor costs, is the only way to justify the stratospheric valuation attributed to it by its shareholders, but it is far from Waymo’s self-driving level, which is now operating on the streets of Phoenix. What’s more, Uber faces a trial for technology theft over its hiring of Anthony Levandowski, who after being forced to leave the company has heard the call and has founded his own religion (and no, I’m not kidding).
The acquisition of 24,000 vehicles, the largest commercial transaction ever closed by Volvo, and with a margin apparently similar to that of its commercial channel, could establish Uber as one of the major players in the transportation industry, while at the same time giving it a much needed image boost. These types of agreements are changing the face of the automotive industry and sparking alliances of all kinds between companies keen not to be left out of the self-driving sector. Avis has signed a deal with Waymo, while Hertz has jumped into bed with Apple, which bring technological development experience with much-needed service management, or GM’s bid to acquire Lyft, or Baidu’s creation in China of Apollo, an open autonomous vehicle platform that other brands can use, are revolutionizing an industry struggling to deal with so many changes at such high speed. If you thought you knew what was going on in the automotive industry, think again. The world is changing very fast.
(En español, aquí)
