Ride service Uber Technologies Inc. said on Thursday it has acquired the self-driving trucks startup Otto, and it also announced that Volvo Car Group has agreed to a $300 million alliance to develop self-driving cars.
Anthony Levandowski, one of Otto’s co-founders, will lead Uber’s self-driving efforts in San Francisco, Palo Alto and Pittsburgh, Uber Chief Executive Officer Travis Kalanick said in a blogpost on the company’s website.
The Uber-Volvo partnership will allow Uber to pool resources with the Swedish-based carmaker, owned by China’s Geely, into initially developing the autonomous driving capabilities of Volvo’s flagship XC90 SUV model. The investment will be shared roughly equally by the two companies..
Volvo aims to launch an experiment involving self-driving cars in China, Britain and Sweden.
Uber will purchase Volvos and then install its own driverless control system for the specific needs of its ride-hailing service.
So far Otto has tested self-driving trucks for highway use only.
Developers hope for productivity gains with the new technology that will enable trucks to drive around the clock, leaving humans to rest, do paperwork and take controls only while going on and off highways.
Uber and rivals such as Lyft could cut the cost of paying drivers if they can gradually incorporate self-driving cars into their fleets.
Levandowski had been product manager for Google’s self-driving program, and left earlier this year to join Otto, which like Alphabet Inc.’s Google is based in Silicon Valley.
Otto has more than 90 employees, up from about 40 in May.
The Uber Advanced Technology Center is in Pittsburgh.
(Reporting by Bernie Woodall; Editing by David Gregorio)