Uber seek­ing to buy self-driv­ing cars

The Pak Banker - - COMPANIES/BOSS -

Ride-hail­ing ser­vice Uber has sounded out car com­pa­nies about plac­ing a large or­der for self-driv­ing cars, an auto in­dus­try source said. "They wanted au­ton­o­mous cars," the source said. "It seemed like they were shop­ping around."

Loss-mak­ing Uber would make dras­tic sav­ings on its big­gest cost - driv­ers - if it were able to in­cor­po­rate self-driv­ing cars into its fleet.

Volk­swa­gen's Audi, Daim­ler's Mercedes-Benz, BMW and car in­dus­try sup­pli­ers Bosch and Con­ti­nen­tal are all work­ing on tech­nolo­gies for au­ton­o­mous or semi­au­tonomous cars.

Ear­lier on Fri­day, Ger­many's Man­ager Magazin re­ported that Uber had placed an or­der for at least 100,000 Mercedes S-Class cars, cit­ing sources at both com­pa­nies.

The top-flight limou­sine, around 100,000 of which Mercedes-Benz sold last year, does not yet have fully au­ton­o­mous driv­ing func­tion­al­ity.

An­other source fa­mil­iar with the mat­ter said no or­der had been placed with Mercedes-Benz. Daim­ler and Uber de­clined to com­ment.

Auto in­dus­try ex­ec­u­tives are wary of do­ing deals with new­com­ers from the tech­nol­ogy and soft­ware busi­ness who threaten to up­end es­tab­lished busi­ness mod­els based on man­u­fac­tur­ing and sell­ing cars.

"We don't want to end up like Nokia's hand­set busi­ness, which was once hugely prof­itable...then dis­ap­peared," a se­cond auto in­dus­try source said about do­ing a deal with Uber.

So- called "au­ton­o­mous ve­hi­cles" have for years been a dis­tant dream but tech­nol­ogy ad­vances and a push by Google , with its huge fi­nan­cial re­sources, to in­tro­duce a pro­to­type have shifted the race to build them up a gear.

An­a­lysts at Ex­ane BNP Paribas have said they see a $25 bil­lion mar­ket for au­to­mated driv­ing tech­nol­ogy by 2020, with ve­hi­cle in­tel­li­gence be­com­ing "the key dif­fer­en­ti­at­ing fac­tor."

But the bro­ker­age does not ex­pect fully au­to­mated cars to hit the road un­til 2025 or 2030, in part due to reg­u­la­tory hur­dles.

In Au­gust 2013, Mercedes-Benz re­sponded to the Google push by de­vel­op­ing an S-class limou­sine that drove be­tween the Ger­man towns of Mannheim and Pforzheim with­out any driver in­put. The 103 km stretch is known as the Bertha Benz route, named af­ter the driver of the first ever car, around 130 years ago.

Mercedes ri­val BMW re­cently said it was con­sid­er­ing launch­ing its own ride hail­ing ser­vice in what would amount to a ri­val busi­ness to Uber. "The value cre­ation is shift­ing from the ac­tual hard­ware to­ward soft­ware and ser­vices," BMW's new CEO Har­ald Krueger said on Wed­nes­day.

That shift is ex­pected to ac­cel­er­ate with the emer­gence of com­pu­t­er­driven au­ton­o­mous ve­hi­cles, and BMW is in­vest­ing in soft­ware and tech­nol­ogy ex­per­tise as a re­sult.

A key hur­dle to driver­less cars has been the ques­tion of li­a­bil­ity in the event of an ac­ci­dent.

Most coun­tries are sig­na­to­ries to the 1968 UN Con­ven­tion on Road Traf­fic which stip­u­lates that a per­son, rather than a com­puter, must be in con­trol of a ve­hi­cle.

In Fe­bru­ary this year, US ve­hi­cle safety reg­u­la­tors soft­ened the rules to al­low driver­less cars, by say­ing an ar­ti­fi­cial in­tel­li­gence sys­tem pi­lot­ing a self-driv­ing Google car could be con­sid­ered the driver un­der fed­eral law, a ma­jor step to­ward ul­ti­mately win­ning ap­proval for au­ton­o­mous ve­hi­cles on roads.

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