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Daimler Will Make Self-Driving Mercedes—And Operate Them Within Uber's Network

Mercedes will thus serve as the owner-operator of the cars

2 min read
mercedes self driving interior
Photo-illustration: Mercedes-Benz

Daimler will build—and operate—a fleet of self-driving Mercedes-Benz cars within the Uber network.

That role makes this deal the first of its kind: Daimler would not only do the design and manufacturing work but also assume all the costs associated with the fleet. Contrast that with the agreement between Uber and Volvo, in which the two companies collaborated on building the self-driving XC90 SUV, which Uber is now testing—and presumably will operate on its own. Lyft, a rival ride-hailing service, has a similar collaboration with General Motors.

The Mercedes robocars are to hit the roads “in the coming years,” Travis Kalanick, founder and chief executive of Uber, wrote on his blog. In other words, not for a while.

The arrangement addresses a problem in robotaxi service that’s often swept under the rug: When automation replaces the Uber driver, who will shoulder the many costs that the driver used to bear?

“Cars, whether autonomous or not, cost a lot of money which has to be paid to the manufacturer before they go into a fleet,” veteran auto industry analyst Mary Anne Keller wrote in September, on LinkedIn. “A small fleet of 100,000 vehicles at US $40,000 per unit amounts to $4 billion that would have to be paid by some entity.”

And the costs don’t end with the purchase of the car. “There is a myth among some tech geeks that electric cars don’t need service,” Keller continued. “Tesla has demonstrated that in fact they need maintenance. Despite all the sensors and millions of lines of code and a large battery, they still have wheels and tires, brakes and other mechanical parts, and fluids that require replacement or adjustment.”

Besides normal wear and tear, rental cars get a lot of abuse from their customers; that’s why rental car services check the car before and after you’ve rented it and charge for every new ding in the metal and every new stain on the upholstery. Today the Uber owner-driver takes care of such chores; in the day of the robotaxi that headache will devolve to the fleet operator—in this model, Daimler.

Already cars are coming with inward-facing sensors designed to check on the driver and make sure he’s got his eyes on the road. In future, robotaxis may also be checking on that jumbo Slurpee you’re clutching—and noting down every sticky drop that spills on the carpet.

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