October 26, 2016      

Autonomous deliveries and ride sharing could arrive sooner than self-driving cars for consumers. This week, Otto showed off an autonomous truck that delivered a trailer full of Budweiser beer in Colorado. The demonstration was the first fruit of Uber Technologies Inc.’s August acquisition of startup Ottomotto LLC and partnership with AB Volvo.

San Francisco-based Uber didn’t disclose how much it paid for Otto, and its deal with Chinese-owned, Sweden-based carmaker Volvo was reportedly worth $300 million.

“Partnership is crucial to our self-driving strategy because Uber has no experience making cars,” said Uber CEO Travis Kalanick. “To do it well is incredibly hard, as I realized on my first visit to a car manufacturing plant several years ago.”

“We’re at the very beginning stages of becoming a robotics company,” he said at a Vanity Fair summit.

Otto (not to be confused with Clearpath Robotics’ OTTO for logistics automation) is less than a year old and has fewer than 100 employees. The autonomous truck purchase represents 1 percent of Uber’s valuation. Recently, Uber was valued at $68 billion, placing the value of its deal with Otto at about $680 million.

Former Googler Anthony Levandowski, who is also one of Otto’s co-founders, will run Uber’s self-driving outfits in San Francisco, Palo Alto, and Pittsburgh. Levandowski was a leader in Google’s self-driving car ventures before departing for Otto, so Palo Alto, Calif., is a bit of a homecoming for him.

Those three cities are also scheduled to see Uber’s autonomous truck and delivery services added to its well-known ride-hailing business.

Self-driving passenger vehicles have gotten more media attention, but the scale, potential profits, and safety concerns are different for fleets of self-driving trucks. In addition, 3.5 million people are truck drivers in the U.S., so job displacement will also have to be addressed.

“The consequences of a software bug causing a 40-ton truck to veer out of control are far worse than the consequences of a similar bug on a 2-ton car, which is likely to be terrifying for the general public and their elected representatives, who oversee the safety regulators,” Steven Shladover, a researcher at the University of California, Berkeley, told the MIT Technology Review.

More on Autonomous Trucks and Other Vehicles:

Riding shotgun for the autonomous truck

The partnership with Volvo is intended to allow Uber to pool its resources for developing autonomous driving capabilities for Volvo’s XC90 SUV. Reuters reported that the investment in the project will be shared roughly equally by both companies.

A time frame for the pair to release a fully autonomous truck or SUV was given loosely as 2021. Volvo is not the only automaker with whom Uber intends to partner. Uber, which does not plan to make its own vehicle, will likely also align with other automakers such as Ford Motor Co.

Ford has said that it wants to make its own self-driving taxicabs. Volvo is also teaming up with Stockholm-based Autoliv on advanced driver-assistance systems, autonomous driving systems, and other safety features.

Uber plans to buy vehicles from Volvo and then install its own driverless technology after the fact.