Just months after its public launch, the self-driving truck startup Otto has been purchased by the ride-hailing giant Uber for an undisclosed amount. According to a Bloomberg estimate, the deal could be valued at about $680 million.
Uber, whose "anyone-can-be-a-cabbie" business model has already shaken up the taxi industry, is also looking to provide autonomous car services in cities. Later this month, the company plans to begin testing self-driving cars on the streets of Pittsburgh, although a human — an Uber engineer rather than a regular self-employed driver — will remain at the wheel to take over if there's trouble.
These recent moves signal Uber's desire to take human drivers out of its business equation entirely. The timing is noteworthy as just yesterday, a U.S. District Court judge in California rejected the company's proposal to settle a class-action lawsuit by current and former Uber drivers who claimed they should be classified as employees rather than independent contractors.
Otto Plus Uber = 'Dream Team'
Co-founded by several veterans of Google, including Anthony Levandowski, who was formerly an engineer with Google's Self-Driving Car Project, Otto just launched in May. The company, which has been testing sensor-equipped autonomous trucks (pictured above), said its mission is to improve highway safety and trucking efficiency.
"Together with Uber, we will create the future of commercial transportation: first, self-driving trucks that provide drivers unprecedented levels of safety; and second, a platform that matches truck drivers with the right load wherever they are," the company noted yesterday in a blog post.
When it comes to this advanced technology stack, Otto plus Uber is a "dream team," Uber co-founder and CEO Travis Kalanick wrote in a post on his company's blog yesterday.
"Anthony is one of the world's leading autonomous engineers: his first invention, a self-driving motorcycle called Ghostrider, is now in the Smithsonian," Kalanick said. "Just as important, Anthony is a prolific entrepreneur with a real sense of urgency."
Like Otto, Uber promotes its technology as a way to improve efficiency and safety on the road. Kalanick cited statistics showing that some 90 percent of the 1 million people killed in collisions every year are caused by human error. "This is a tragedy that self-driving technology can help solve," he said.
'Outrageous PR Stunt'
In a separate development, Bloomberg Businessweek reported yesterday that through a partnership with Volvo Uber will begin deploying specially equipped Volvo XC90 sports utility vehicles to test self-driving technology with real-life Uber customers in Pittsburgh. Passengers requesting rides will randomly get self-driving cars instead of regular Uber vehicles, although two Uber employees will be in front to monitor the cars' performances and take over if issues arise.
John Simpson, Privacy Project director at the advocacy organization Consumer Watchdog, which has urged caution and strict regulation for self-driving vehicle technology, called Uber's Pittsburgh tests an "outrageous PR stunt."
"There has been no adequate demonstration that Uber's robot cars are safe," Simpson told us today. "It is unconscionable for them to offer rides to passengers at this stage." Uber's move into autonomous trucks with its purchase of Otto shows it is "doubling down on its bet on robot technology, but we're simply not there yet," he added.
One trucking concept, called "platooning," would involve using a lead truck to control a series of other big rigs behind it, but a human driver would still be needed to monitor those vehicles, Simpson said. "Self-driving trucks, because of their size and weight, raise serious safety issues if there is an attempt to operate them intermingled with car traffic," he said.