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Volvo Car, the Swedish automaker under the management of China’s Zhejiang Geely Holding Group, has sealed a deal on Monday to supply up to 24,000 fully self-driving cars to San Francisco-based ride-hailing company Uber Technologies, which is expanding from an app used to call a taxi to the owner and operator of a fleet of cars.

Volvo Car and Uber Tech

The deal signals Uber commitment to autonomous cars under newly appointed Chief Executive Officer Dara Khosrowshahi.

Volvo said it would give Uber cars with similar platforms existing in its flagship XC90 luxury sport utility vehicles as part of a non-exclusive deal from 2019 to 2021. The autonomous system that would be used in the Volvo Cars, which have yet to be built, is under development by Uber’s Advanced Technologies Group.

“The autonomous industry is being disrupted by technology and Volvo Car chooses to be an active part of that disruption,” Hakan Samuelson, Volvo Car CEO, said in a statement.

“It’s a new market that’s emerging and we’re the first to be delivering into that segment.”

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Since 2016, Volvo Car and Uber have been creating a self-driving car. Uber also has signed a partnership with Japan’s Toyota Motor and Germany’s Daimler. However, the latest deal offers Volvo Car a good start on its two rivals in mass-producing and supplying Uber.

The 24,000 cars Uber buyout would be Volvo’s largest order by far and the biggest sale in the autonomous vehicle industry, giving the U.S. firm, which is losing more than $600 million a quarter, its first commercial fleet of cars.

The Swedish automaker also wants to supply fully self-driving cars to other ride-sharing service companies. Its contract with Uber is not exclusive.

Volvo Car has been strongly pursuing new technologies and has revealed plans to make all new models sold from 2019 electric or hybrid.

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Uber Fined

On Monday, Colorado regulators fined Uber with $8.9 million, saying the ride-sharing service company permitted 57 people to drive and use its service even if they lacked valid driver’s licenses or had committed other offenses that would have disqualified them.

The Colorado Public Utilities Commission said based on its investigation, it was found out violations that included 12 drivers with felony convictions, 17 drivers with major moving-vehicle violations, and three drivers with a type of driver’s license required after recent drunk-driving convictions.

“We have determined that Uber had background check information that should have disqualified these drivers under the law, but they were allowed to drive anyway,” Doug Dean, the commission’s director, said in a statement. Uber Technologies Inc said in a statement it recently learned a mistake in its background check process in Colorado and started working to solve the issue.

Uber has had struggled in the face of a federal investigation into whether it violated bribery laws, allegations of sexual harassment, and other issues that caused the company to bring in a new chief executive and take steps to enhance its corporate culture. It has about 600,000 drivers across the United States.

Uber and Lyft

Uber’s competitor Lyft has struck a research partnership this year with Alphabet Inc’s unit Waymo and secured deals with Ford Motor Co. and startups Nutonomy and Drive.ai to integrate self-driving cars into its fleet.

Volvo’s partnership with Uber and Ford’s with Lyft indicate the pressure on carmakers to avoid getting outdated in a world of reinforced automation and on ride-services companies to start automating to slash driver costs and turn profits.

 

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