To The Future And Step On It

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What's going on?

In the biggest deal of its kind so far, Uber has agreed to buy up to 24,000 vehicles from Volvo as part of its efforts to build a fleet of driverless cars (tweet this).

What does this mean?

The deal is, admittedly, non-binding but its still a major indication of the future of the automobile industry. Beginning in 2019, Volvo will supply Uber with base cars, similar to its current XC90 SUV model, that include some form of autonomous driving technology. Uber will then add its own sensors and software to make the cars fully autonomous and capable of picking up passengers.

Why should I care?

For markets: The automakers role is changing fast and established firms are scrambling to position themselves for the future.

Its quite possible that the era of mass individual car ownership is ending. If so, the change will present a huge challenge to the automotive industry, which has got used to people regularly buying new cars (often with borrowed money). By selling to fleet operators or perhaps operating fleets themselves auto companies can keep churning out cars (this order represents about 5% of Volvos current annual sales a significant chunk). Its still possible that overall car sales will decline: a fleet model may mean fewer cars on the road in aggregate.


For you personally: Are we ready for robot cars?

Perhaps the most surprising aspect of Mondays announcement is the 2019 delivery date; the timeframe to roll out driverless cars at scale is ambitious. But Volvo isnt alone General Motors has said its quarters not years away from its own autonomous vehicles, and Tesla not-so-quietly announced the launch of a driverless truck last week. One broader question is how quickly laws and regulations can develop to allow driverless vehicles to operate widely once we have the technology a time which appears to be coming sooner rather than later.

Originally posted as part of the Finimize daily email.

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