Ride-hailing service Uber has ordered at least 100,000 autonomous S-Class Mercedes Benz cars, says reports.
Autonomous cars are expected to hit the roads not before 2020 but they will save Uber a lot of money spent on drivers. According to sources familiar with the matter, Uber has been shopping for self-driving cars and has now placed orders with the German carmaker.
"They wanted autonomous cars. It seemed like they were shopping around," says the anonymous source.
Many vehicle makers have been working on fully autonomous as well as semi-autonomous cars and Mercedes is one of them. However, the company currently does not have any fully autonomous car on offer. Mercedes is hoping to launch its autonomous S-Class in 2020.
In August 2013, Mercedes Benz developed an S-class limousine, which drove 103 kilometers (64 miles) between the German towns of Mannheim and Pforzheim without any input from the driver, which reflects the company's efforts towards autonomous car technology.
Analysts suggest that by 2020 the autonomous car technology market will be worth $25 billion. Companies may be ready to launch autonomous cars by 2020 but analysts believe that these cars will not make their way to the roads until 2025 or 2030 due to government regulatory hurdles.
Individual countries and states in America have different laws for testing self-driving cars. In 2011, Nevada passed a law that allowed testing of autonomous vehicles there. Auto industry experts suggest that regulators are very likely to pass legislation for autonomous cars if these cars reduce pollution and congestion.
The American transportation networking company operates in more than 50 countries and about 300 cities around the world but it is not making profits. Ordering more than 100,000 Mercedes S-Class sedans not only points at cutting driver costs but also highlights at the company's desire of offering ultra-premium ride to customers.
Neither Uber nor Mercedes has commented on the 100,000 Mercedes S-Class car orders. However, it is not a secret that Uber is also pursuing its own self-driving technology. Uber has also announced the expansion of its Pittsburgh facility, which will be used for testing driverless cars.
Uber's business model relies heavily on drivers using their own vehicles. Ordering 100,000 autonomous cars is definitely a change of business model, which may help the company in reducing the cost-per-mile and also address the assaults made by Uber drivers on passengers.
It is worth noting that German carmaker BMW has also revealed its plans to start a ride hailing service, which will compete with the likes of Uber.