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

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.”


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.


SMD Mon, 11/20/2017 - 19:36 Permalink

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.

Ben A Drill Mon, 11/20/2017 - 19:41 Permalink

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.

Ben A Drill Stuck on Zero Mon, 11/20/2017 - 20:25 Permalink

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.

In reply to by Stuck on Zero

Davilis Mon, 11/20/2017 - 19:42 Permalink

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.

Throat-warbler… Mon, 11/20/2017 - 19:45 Permalink

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.

Yen Cross Mon, 11/20/2017 - 22:34 Permalink

  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

coast1 Mon, 11/20/2017 - 19:58 Permalink

 .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

CRM114 Mon, 11/20/2017 - 20:05 Permalink

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!

adr Mon, 11/20/2017 - 20:07 Permalink

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. 

junkyard dog Mon, 11/20/2017 - 20:15 Permalink

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.