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Uber Freight forms long-term partnership with self-driving truck startup Aurora

Uber Freight and Aurora Innovation announced a multi-year collaboration that will make Aurora’s self-driving technology available on the Uber Freight network by 2030.

The deal gives Aurora access to transportation customers as it prepares to launch a fully driverless commercial service later this year. It also helps Aurora gain access to long-term customers through Uber Freight’s network, going to where those customers are already. Uber Freight currently manages about $18 billion worth of commercial freight for its transportation customers.

The partnership is an extension of a previous driver-driven commercial pilot in which Aurora delivered freight on the Uber Freight network between Dallas and Houston.

The partnership comes as the freight industry is in a recession due to a combination of factors including rising prices, falling customer demand and higher fuel costs. The resulting drop in freight rates has led to the closure of thousands of trucking companies, including Jeff Bezos-backed Convoy. Uber Freight has also been hit by a downward trend in revenue per vehicle – its first-quarter revenue fell 8% year-over-year and was flat quarter-over-quarter.

Uber Freight is the logistics business that Uber spun off in 2018 with the goal of providing transportation customers with a technology that aims to solve many of the problems in today’s trucking industry, including labor shortages and underutilized fleets. Uber may also be looking to get a return on its investment in Aurora and its investments in self-driving technology.

Uber has invested heavily in the transportation sector over the years, including developing self-driving cars through its self-driving unit, Uber ATG. Although Uber sold Uber ATG to Aurora in 2020 to abandon high-capex projects and achieve profitability, Uber still managed to retain some shares in self-driving cars. As part of this complex transaction, Uber handed over its equity in Uber ATG and invested $400 million in Aurora, giving it a 26% stake in the combined company.

In other words, Uber really wants to ensure that both its freight business (it has also partnered with self-driving truck companies Waabi and Torc Robotics) and Aurora are successful.

The cooperation between the two companies includes several stages.

Aurora plans to launch a fully driverless commercial service by the end of 2024 and will launch the service on the Uber Freight network through a Transportation as a Service (TaaS) model. Aurora will own and operate a fleet of up to 20 trucks produced by Paccar and Volvo and appear as a carrier on the Uber Freight network, which shippers can hire to transport freight.

In the future, the relationship will transition to a driver-as-a-service (DaaS) model, where carriers purchase trucks equipped with Aurora Driver technology. These carriers will then use these trucks to provide services to shippers on the Uber Freight network.

“Carriers will purchase AV trucks from OEMs at whatever price they negotiate with the OEM supplier, and [Aurora] Drivers will be provided,” Zac Andreoni, vice president of business development at Aurora, told TechCrunch.[Carriers] We will be paid a rate commensurate with what we currently pay our drivers, obviously adjusted based on the value we provide.”

Andreoni noted that the DaaS offering comes with Aurora maintenance and support, including access to the company’s command center for remote operators to help get trucks out of trouble and back on mission.

Aurora is still a few years away from truly bringing its DaaS model to market.

“It takes anywhere from a year to a year and a half for any fleet that wants to buy a truck to sign the final documents on the number of trucks they want to buy and the specifications they want to buy,” Olivia Hu, head of self-driving trucks at Uber Freight, told TechCrunch. “So the sales cycle is actually much longer.”

To get those customers lined up, Uber Freight and Aurora this week launched a so-called Premier Autonomy program. The goal of the program is to give carriers an early path to buy and onboard Aurora Drivers so that when the assets become available for purchase, carriers know how to use them and their systems are properly integrated.

“We’re going to start by raising awareness, engaging fleets, giving them a voice – especially the fleets in our network – and start designing what they need it to look like. [Aurora’s] We are preparing to launch driver as a service,” said Hu Houkun.

The timing of the DaaS launch also aligns with Aurora’s agreement with automotive supplier Continental, which plans to mass-produce the company’s self-driving car hardware kit by 2027.

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