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Daimler partners with Uber to build and operate a fleet of self-driving cars on the ride-sharing network

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Daimler and Uber made an announcement today that explains a few rumors that were going around in the auto industry last year. The two companies announced a partnership that will result in the German automaker building and operating a fleet of self-driving cars on Uber’s ride-sharing network.

Uber has been open about its ambitions to include large numbers of autonomous vehicles on its ride-sharing network.

In 2015, famous Silicon Valley venture capitalist and early Tesla investor Steve Juvertson recalled a conversation he had with Uber CEO Travis Kalanick:

“Travis recently told me that in 2020, if Teslas are autonomous, he’d want to buy all of them. He said all 500,000 of estimated 2020 production, I’d want them all, but he couldn’t get a return call from Elon.”

Then in 2016, Kalanick was reportedly shopping around a deal to bring 100,000 autonomous cars on its network. At the time, Daimler was reported as having closed a deal with Uber’s CEO.

While they are not talking about any particular number of vehicles in the fleet, the deal today looks similar to the plans that leaked last year.

Uber says that it is “opening up its platform” to automakers and that Daimler is the first company to take advantage of it.

The German automaker wrote in a press release:

“Under the terms of the cooperation Daimler plans to introduce self-driving vehicles also on Uber’s global ridesharing network in the coming years. Daimler is the first auto company to join with Uber as it opens up its platform for manufacturers to introduce their own self-driving cars.”

The timeline is vague, but under Daimler’s new corporate strategy entitled CASE – which stands for “Connected”, “Autonomous”, “Shared & Services” and “Electric” – Mercedes-Benz plans to bring to market a fully autonomous vehicle around 2020.

Uber is also independently working on its own self-driving effort, but as Kalanick said today, they don’t plan to build their own cars and instead work with automakers:

Of course, we can’t do it alone. Auto manufacturers like Daimler are crucial to our strategy because Uber has no experience making cars—and in fact, making cars is really hard. This became very clear to me after I visited an auto manufacturing plant and saw how much effort goes into designing, testing and building cars.

That’s why instead of building them ourselves, we want to partner with the best auto manufacturers in the world. We can combine Uber’s global ridesharing network with the world-class vehicles of companies like Daimler, so that Uber riders can have a great experience getting around their cities.

It sounds like it could be the first of more announcements about automakers directly operating fleets of vehicles on Uber’s network instead of Uber or car owners operating those self-driving vehicles.

The ride-sharing space is poised to be disrupted by the advent of autonomous driving and it’s still not clear who will own the mileage ultimately.

This deal seems to introduce a new structure of an automaker owning the vehicles on a third-party network. Daimler also has its own ride-sharing efforts through acquisitions and investments in Backlane, RideScout, and MyTaxi.

There’s also Tesla. The automaker made it quite clear that it plans to operate its own network of self-driving cars, but the vehicles on the ‘Tesla Network’ will be a mix of cars owned by its customers and the company’s own fleet. Tesla CEO Elon Musk said that the majority of ‘Tesla Network’ revenue will go to owners: ‘it’s not Tesla versus Uber, it’s the people versus Uber’ he added.

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