Ride-hailing company Uber Technologies made a giant leap into the world of autonomous vehicles Thursday by acquiring autonomous truck startup Otto and crafting a deal to develop self-driving cars with Volvo.
The deals demonstrate how autonomous vehicle technology is starting to spread in both the consumer and commercial markets.
Founded by two senior engineers in Google’s self-driving car and mapping divisions, Otto is developing kits that can be used to transform existing big rigs into autonomous trucks.
“Together with Uber, we will create the future of commercial transportation: first, self-driving trucks that provide drivers unprecedented levels of safety; and second, a platform that matches truck drivers with the right load wherever they are,” Otto founders Anthony Levandowski and Lior Ron said on the company’s website Thursday.
Terms of the deal were not disclosed. Both Otto and Uber are based in San Francisco.
Levandowski will lead the combined self-driving initiatives at both companies, looking at how the technology can be applied to personal transportation, delivery and trucking, said Travis Kalanick, Uber’s chief executive and co-founder.
Kalanick said that Levandowski will lead an autonomous vehicle development “dream team…… Anthony is one of the world’s leading autonomous engineers: his first invention, a self-driving motorcycle called Ghostrider, is now in the Smithsonian.”
Uber, which started out as shadow taxi service allowing passengers to hail drivers via a smart phone app, is rapidly building an autonomous technology infrastructure that will compete with the major automakers and Google’s self-driving car project.
“We now have one of the strongest autonomous engineering groups in the world,” Kalanick said.
But it is an increasingly crowded field. Ford Motor Co. on Wednesday said it plans to have a high-volume, fully autonomous car in commercial operation in a ride-hailing service by 2021.
“The next decade will be defined by automation of the automobile, and we see autonomous vehicles as having as significant an impact on society as Ford’s moving assembly line did 100 years ago,” said Mark Fields, Ford’s chief executive.
The purchase of Otto, which has 90 employees, adds the resources of the truck company’s Silicon Valley research center to Uber’s Advanced Technologies Center in Pittsburgh. Nearly every major automaker has a center in the Silicon Valley — several within just miles of each other — researching robotic driving.
The Uber-Otto tie up represents a blurring of the consumer and commercial sides of the transportation business, said Cathy Roberson, head analyst for consulting firm Logistics Trends and Insights.
“It's like the internet where the business-to-consumer and business-to-business models are blurring,” Roberson said. “You can see the same thing going on in the automotive and trucking world.”
Roberson said that Uber was a surprise buyer for Otto. She thought the company could be sold, but more likely to Google or Daimler Trucks, which is pushing hard into self-driving truck research.
“But it is a good move for Uber,” Roberson said. “Uber is facing regulatory hurdles in many cities limiting is ride hailing service. They needed to start thinking about expanding their lines of business.”
Trucking and commercial transport will likely see a faster adoption of self-driving vehicles than the consumer market because there is a better business case, Friedmar Rumpel, a director in the automotive practice of global consulting firm AlixPartners, told Trucks.com.
Truck drivers, for example, are limited in the number of hours they can drive in a day and a week. When they are idle, the truck, an expensive asset, also is grounded.
“There is a high interest in getting commercial transport more automated,” he said. “Uber is going to take this to the next level by trying to eliminate the driver altogether.”
A chronic truck driver shortage, made worse by the difficult lifestyle of truckers, will push the industry into autonomous trucking.
Added impetus also comes from the drive cycles of trucks, Rumpel said
“Truck routes are considerably simpler than passenger traffic,” he said.
Unlike an Uber driver or taxi, big rigs rarely have to navigate suburban streets. Trucks travel on highways, usually from factory to distribution center, or warehouse to store, Rumpel said. That style of driving is more predictable and better suited to autonomous driving technology, he said.
Otto already has a fleet of five test trucks operating mostly on highways and plans to have at least two more in service this year.
“We’re moving with urgency,” Ron told Trucks.com last week. “It’s about extending our own fleet to a few more units and then after that adding more units that will allow us to extend into a wider footprint.”
He said Otto’s self-driving truck kits may be ready for commercial use in “a couple of years.”
The company’s system uses a variety of sensors including radar, lidar — a form of radar only with lasers — and cameras to paint a digital picture of the truck’s surroundings. Software will then determine speed, braking, acceleration and other functions as the truck moves down the highway.
For now, Otto’s sees its technology as a form of driving assistance rather than a replacement of the truck’s driver. Otto also is developing an electronic system that will help drivers find hauling contracts.
“Our self-driving trucks will allow drivers to rest while their truck is moving, and our platform will ensure drivers can easily find loads and are paid fairly,” Levandowski and Ron said in the Uber announcement.
“By combining these two technologies, we can create a freight network that is constantly learning and improving,” they said. “Each truck that joins the network can provide valuable information that makes all other trucks safer and more efficient. In turn, drivers get paid more and shippers get a more reliable service.”
The Volvo deal calls for Uber and the Swedish automaker to invest $300 million in autonomous driving technology with the eventual goal to develop driverless cars.
The “partnership is crucial to our self-driving strategy because Uber has no experience making cars,” Kalanick said. “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.”
In the coming weeks, Uber plans to let passengers in Pittsburgh summon self-driving Volvo XC90 sport-utility vehicles. While the vehicles will be equipped with a complete suite of autonomous driving sensors and software, there still will be a human in the driver’s seat ready to take over the controls in an emergency.
This is a key step in advancing self-driving vehicles, said Adam Jonas, an analyst at Morgan Stanley Research.
“First time civilians can experience autonomous driving – an important hurdle to winning over the public, local government and regulatory bodies,” Jonas said.
Jonas said he sees “the roll-out of a shared and autonomous car fleet in a city by city expansion not unlike the introduction of the electric utility grid by the likes of Edison in the late 1800s. We look for more announcements by other firms (tech and auto) in partnership with cities around the world.”