Neither Volvo nor Uber released financial details, but based on list prices for the cars the deal could be worth more than $1 billion (around 850 million euros). The deliveries of Volvo's purpose-built XC90's are planned for 2019-2021.
The new XC90s that Uber is sourcing from Volvo will be more advanced in their self-driving abilities compared to the existing test cars.
Uber has been testing prototype Volvo cars for more than a year, with safety drivers in the front seat to intervene if the self-driving system fails, in Tempe, Arizona, and Pittsburgh. The deal is an extension of an agreement Uber made with Volvo two years ago, when the company first began heavy research on autonomous vehicles.
"Everything we're doing right now is about building autonomous vehicles at scale", Jeff Miller, Uber's head of automotive alliances, said. The Volvo XC90 is already the base of Uber's current self-driving test auto. San Francisco-based Uber will add its own sensors and software to permit pilot-less driving.
"Our aim is to be the supplier of choice for AD ride-sharing service providers globally", said Håkan Samuelsson, president and chief executive of Volvo. One of the main reasons why Uber went with the Volvo XC90 SUV is because it features a core for autonomous driving technology that will allow Uber to add its own automation features on top of what's already offered, Volvo states.
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Uber wasn't immediately available to comment, and Volvo deferred questions to Uber.
In just over a year - in a city somewhere in the United States - your Uber could pick you up without a driver behind the wheel.
"We don't know exactly how an autonomous world will look".
Moreover, the deal marks a potentially major shift in Uber's strategy; from a taxi app to an operator of a fleet of cars.
Uber, which didn't put a time frame on when it might introduce driverless rides, said its approach means anyone in the industry can "deploy its tech".