Cash-Hemorrhaging Uber Announces Plans To Drop $1 Billion On Driverless Volvos

Tyler Durden's picture

Earlier this summer we noted Uber's staggering 2Q cash burn of $600 million which equates to roughly $7 million in net cash outflows every single day.  The staggering, and consistently growing, cash burn figures resulted in several mutual funds announcing they would slash their valuations of the struggling rideshare company by up to 15%. 

Of course, if cash burn was a concern before for Uber investors before then they should probably take note of the company's newly announced decision to drop roughly $1 billion on driverless Volvos.  According to Bloomberg, Uber has just penned a deal to pick up 24,000 brand new Volvo XC90's in their push to flood the U.S. market with self-driving taxis.

Uber Technologies Inc. agreed to buy 24,000 sport utility vehicles from Sweden’s Volvo Cars to form a fleet of driverless autos, Bloomberg News reports.

 

The XC90s, priced from $46,900 at U.S. dealers, will be delivered between 2019 and 2021 in the first commercial purchase by a ride-hailing provider, Volvo said in a statement Monday. San Francisco-based Uber will add its own sensors and software to permit pilot-less driving.

 

“This new agreement puts us on a path toward mass-produced, self-driving vehicles at scale,” Jeff Miller, Uber’s head of auto alliances, told Bloomberg News. “The more people working on the problem, we’ll get there faster and with better, safer, more reliable systems.”

 

“The automotive industry is being disrupted by technology and Volvo Cars chooses to be an active part of that disruption,” Chief Executive Officer Hakan Samuelsson said. “It’s a new market that’s emerging and we’re the first to be delivering into that segment.”

Volvo

Of course, as we've pointed out multiple times before, to the extent the technology works consistently, avoiding the nasty consequences of death and mayhem in the event of failure, autonomous vehicles are worth big money to Uber and consumers...though not so much for the automotive OEMs (see "Ford Announces Plans To Self-Destruct Starting In 2021").  As we've pointed out, the cost of paying drivers is a substantial portion of the roughly $1.00 per mile charge paid by Uber riders.  To the extent that cost can be removed from the equation then fares charged by companies like Uber will decline materially.

Unfortunately, for the auto OEMs the story is the exact opposite.  In theory, truly autonomous cars could result in substantial increases in passenger car utilization rates and, therefore, declines in annual car sales.  But apparently, Volvo CEO Hakan Samuelsson isn't worried (yes, we can sense the pure optimism in the quote below):

“That could be seen as a threat,” says Volvo Cars CEO Hakan Samuelsson. “We see it as an opportunity.”

But still, even if the technology works, the question remains how quickly consumers will adopt it, if at all. Certainly there certainly has been no shortage of videos hitting Youtube lately of driverless cars plowing through red lights and getting into accidents...which seems less than ideal.

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DownWithYogaPants's picture

I'm not getting in one.  Google can't even do a good Chinese translation and I am to expect this to work flawlessly?

813kml's picture

I hope Volvo got the cash upfront because Uber probably won't be in business come 2019.

The idiots should have IPO'd when they had the chance, their greed is all that's gonna get "disrupted".

evoila's picture

Yeah. Try using google translate or lens in Japan. Fail. 

yogibear's picture

Uber is doing the Amazon model.

Fatso's picture

Volvo Uber Alles

Automatic Choke's picture

great idea!  what could go wrong?

 

scrappy's picture

I do not particularly like anal retentive volvo drivers anyway.

What could go wrong indeed!

Their client base for cars anyway, will bolt for safety concerns, which is why they drive them presently.

Count on it.

 

SMD's picture

Everyone understands driverless means plug-in electric meaning you will soon not be *permitted* to drive your car where you choose. It is the end-game of Jewish control of every moment of our lives.

Herodotus's picture

A driverless UBER vehicle will soon be arriving to take you directly to a nice camp.

HowardBeale's picture

We're Uber, and we're here to help...

Dontblamethegoat's picture

Don't forget the thugs with guns that will steal them when they stop to avoid hitting one of them ...

DEMIZEN's picture

right on! drive or ill put a cap in your head.

DEMIZEN's picture

right on! drive or ill put a cap in your head.

RockySpears's picture

How do you steal a car with no pedals or steering wheel?

How is the 2nd hand "driverless" car market anyway?

 

RS

Pfeffernusse's picture

It's the JEEEWWWWWS

 

Fucking moron

Ben A Drill's picture

This will be a complete fail. One motorcycle accident and it's all over. Driverless cars will never work. One kid playing ball and runs out in the street and gets killed by a driverless car and it's all over.

You can never trust a computer program, never. It will work until it doesn't.

Stuck on Zero's picture

Computer drivers will be bad but will get better. Many people are horrible drivers but they will never get better. Also remember demographics. There will soon be millions of 90 year olds behind the wheel, dropping dead and plowing into crowds of pedestrians.

Ben A Drill's picture

You can't program for stupid drivers. Teenagers and motorcycles, and commuters take the most dangerous chances. The poor bicyclist doesn't stand a chance. How is AI suppose to figure that out in rain, sleet, snow, hail, sun glare, and crazy lane changes due to construction? Ever drive in fog?

What is a driverless car going to do in a complete white out or fog?

To many variables.

Just who or what company is going to insure a driverless car or truck?

They must be asking for Bankrukcy if they do.

Moving and Grooving's picture

'They must be asking for Bankrukcy if they do.

' I'm sure that Congress, in their infinite wisdom (and after cashing their checks, of course) will exempt them from any and all liability. And figure out how to subsidize someone who already has too much money along the way. .

 

Minister of Bread and Circuses's picture

Human drivers kill people too. All that matters is whether human or computer drivers kill people at a higher rate.

Ben A Drill's picture

Humans have insurance. Yes accidents do kill drivers and anyone else in the path. Do computers have to pass a driving test?

Does a computer know what to do in a tunnel? Or how to react to a accident ?

How about one police car blocking all lanes on a freeway? Can a computer figure that out? I highly doubt it.

Xena fobe's picture

Yes.  This will only be workable on dedicated autonomous only roads.

Davilis's picture

I find the "but will people want them?" question to be entirely silly. Plenty of people will gladly pay 50% less for an Uber that lacks a driver. It's as simple as that.

NurseRatched's picture

Greatly reduces the involvement of the Uber-paid stalker/rapist/attacker.  They might be able to charge women more for this service.

SHRAGS's picture

People will take the discount right up to the point something goes wrong & they get injured, maimed or killed & either they or their family decides to sue.  Will the courts discount the value of the settlement on the basis of a discounted ride price?

any_mouse's picture

Did they say Uber would reduce fares?

No driver means more corporate profits.

roddy6667's picture

I doubt it. After allowing for the depreciation on their vehicle for mileage, Uber drivers probably make less than minimum wage. They are just borrowing against the equity in their vehicle.

NurseRatched's picture

Hey Volovo, get paid in full, up-front, before you deliver any of them to Uber.

Throat-warbler Mangrove's picture

Nobody ever talks about the accuracy of the digital maps.  In Ireland, Google told me to turn right into an on-coming bicycle path.  Blindly following that kind of error will result in disaster.

pitz's picture

Google Maps  wanted me to drive into a swamp.  It also sent me into the ghettos of Gary when I was trying to drive from Detroit to Madison, Wisconsin.  

HowardBeale's picture

"It also sent me into the ghettos of Gary..."

A blatent attempt to balance the black-white murder victim ratio...

Catahoula's picture

Volvo wins. Uber loses

Yen Cross's picture

  This shit is so stupid... The tree huggers love their Volvos and Subarus.

  You know the top is approaching, when the  assclown snowflakes would rather pay Johnny Cab, to cart their worthless asses to BLM retreats.

  * Trader tip  - BoJ is selling paper gold, and I'm short eur/jpy.

  You're welcome.  y/c

Restorative_Ally's picture

All these false flag car attacks have been softening us up to being run down by driverless cars in beta testing. These elite really think ahead!

coast1's picture

 .There are very smart people who can control the computer..  I am going to program my girlfriends computer to never stop at the mall lol

scrappy's picture

An IOT Dildo business perhaps?

I smell opportunity.

Vulva, the shape of things to come.

Ben A Drill's picture

Does a computer program know what to do in a accident? I can just see the police trying to pull over a driverless car. The video will be epic.

Bastiat's picture

"I said get out of the car!"

roddy6667's picture

There will be episodes of "Cops" with high speed chases and vehicles running over cops. Can't wait until hackers can take over an Uber car and raise hell. Merriment ensues.

Scornd's picture

I assume the doors lock and the car sends a report to the cops. Then they call emt .Then a tow truck . And ur insurance.

CRM114's picture

Tesla, now Uber.

Throwing massive further amounts of cash at future pie-in-the-sky ideas is somehow supposed to distract us from the inevitable.

The crash that's coming is going to be a real doozy.

 

Fasten Safety Belts!

Dragon HAwk's picture

Save on driver Salary,  pay for it's self in 40 50 years if you forget about car maintenance that is.

VWAndy's picture

Um who is going to be fixing the self driving stuff? Jiffy lube? lol the dealers dont have the talent for that stuff.

adr's picture

You will be allowed to drive your car, just that the cost of a driver's license will be $2000 a year and your auto insurance rates will look like health insurance, $20k a year since you as a human will be the most "dangerous" thing on the road. 

No matter what happens you will be at fault. Even of a driverless car tbones you at an intersection because it failed to detect the light, you will be at fault because a driverless car would have detected the other car not seeing the light and stopped. At least that is what they'll say. 

One infraction and your license will be gone. 

Your fine will automatically be deducted from your Bitcoin wallet as well as $200 a month for damages to the self driving car's manufacturer and passenger. 

Driverless cars and cryptos are the Jew run future. That is their plan of total domination. You will not go anywhere they don't approve and they will take a cut of every transaction you make. You won't even have a choice because they will control  your wallet. Step out of line and your wallet address will be removed from the Blockchain and your funds confiscated. 

It's not a scifi fantasy, it's THE PLAN. 

Mr. Universe's picture

You are starting to sound like a Dick. As in Philip K..

junkyard dog's picture

What a neat trick, an Uber vehicle without a human driver stops to pick up two women. A voice comes over the radio to confirm who they are and where they wish to be taken. The cameras in the car have scanned the women. The car leaves the stop but, does not take the women where they want to go and, there is nothing the women can do about it. Welcome to the sex slave delivery system. Your wife, sister, daughter and mother are next.