Volvo Cars to supply tens of thousands of autonomous drive compatible cars to Uber – Volvo Car Group Global Media Newsroom

Uber and Volvo move to deliver the first fleet of autonomous ride-sharing cars. This comes sooner than many expected, and raises a very important question about Uber, which has relied on drivers to supply, clean, and maintain cars in the past: Is there any margin in autonomous vehicles? The acquisition of 24,000 self-driving cars for approximately $1 billion will require management and maintenance of those vehicles be performed by Uber, which, at let us say $30 a day in maintenance fees (24,000 x $30 x 30 days = $21 million a month in costs — or $259 million annually, and we haven’t covered parking, fuel costs, and cleaning up after messy riders intra-day).

Taking humans out of the car provisioning equation doesn’t pencil out. Uber’s model benefitted from individual ownership of vehicles.

Volvo Cars, the premium car maker, has signed a framework agreement with Uber, the ride sharing company, to sell tens of thousands of autonomous driving compatible base vehicles between 2019 and 2021.

Source: Volvo Cars to supply tens of thousands of autonomous drive compatible cars to Uber – Volvo Car Group Global Media Newsroom

About Mitch Ratcliffe

Mitch Ratcliffe is a veteran entrepreneur, journalist and business model hacker. He operates this site, which is a collection of the blogs he’s published over the years, as well as an archive of his professional publishing record. As always, this is a work in progress. Such is life.

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