Should Uber buy all 24,000 cars, it would be Volvo's largest order by far and the biggest sale in the autonomous vehicle industry, giving Uber, which is losing more than $600 million a quarter, its first commercial fleet of cars. The ride-hailing company has long depended on drivers, which the company treats as independent contractors, to make up its fleet, but the next few years will likely see a flood of Uber-owned driverless vehicles taking the streets. The company will install its own sensors and software in the vehicles.
Uber wasn't immediately available to comment, and Volvo deferred questions to Uber.
Uber's initiative to purchase 24,000 speeds up the process to replace human drivers.
Uber's Volvo XC90 self-driving vehicle is shown during a demonstration of self-driving automotive technology in Pittsburgh in 2016.
Volvo will use the same base vehicle in the development of its own independent autonomous auto strategy, which is planned to culminate in the release of its first fully autonomous auto in 2021.More news: Trump to re-designate North Korea as terrorism sponsor
Although, Uber and Volvo have entered into an agreement, there is still no time period set when Uber will launch its driverless ride hailing service.
In an interview, Uber's Head of Automotive Alliances, Jeff Miller, claimed, "Everything we're doing right now is about building autonomous vehicles at scale".
Volvo and Uber had earlier agreed in 2016 to jointly develop more advanced self-driving vehicle systems. 'The more people working on the problem, we'll get there faster and with better, safer, more reliable systems'.
"We are open to deliver to more taxi companies", Volvo Cars CEO Hakan Samuelsson told Swedish financial newspaper Dagens Industri.
The announcement also comes ahead of some uncertainty for Uber's self-driving technology development. Uber's move will definitely boost sales at Volvo's end and also aid in keeping the costs low at the Chinese-controlled group's own plans for 2021 considering fully autonomous cars.