Uber Freight and Aurora Innovation have announced a multi-year partnership that will see Aurora’s self-driving technology offered on the Uber Freight network by 2030.
The deal gives Aurora access to shipping customers as it prepares to launch its fully driverless commercial service later this year. It also helps Aurora secure long-term customers through Uber Freight’s network by going where those customers already are. Uber Freight currently manages approximately $18 billion worth of commercial transportation for shipping customers.
The partnership is an expansion of an earlier commercial pilot with a driver that saw Aurora transport goods on the Uber Freight network between Dallas and Houston.
The tie comes amid a freight downturn caused by a number of factors including higher commodity prices, lower customer demand and increased fuel costs. The resulting drop in fares has caused the closure of thousands of trucking companies, including Jeff Bezos-backed Convoy. Uber Freight has also been hit by the trend of lower revenue per load — its revenue at first quarter down 8% year-on-year and flat quarter-on-quarter.
The goal for Uber Freight, the logistics business spun off from Uber in 2018, is to connect shipping customers with a technology that purports to solve many issues in trucking today, including labor shortages and underutilized fleets. Uber is also likely to see a return on its investment in Aurora in particular and self-driving technology in general.
Over the years, Uber has made a handful of bets on transportation, including autonomous vehicles through its Uber ATG self-driving unit. Despite selling Uber ATG to Aurora in 2020 in an effort to exit high-cap projects and achieve profitability, Uber has managed to retain some stake in AVs. As part of the complex deal, 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 has a genuine stake in ensuring that both its freight business — which has also secured partnerships with self-driving truck companies Waabi and Torc Robotics — and Aurora succeeds.
The cooperation between the two companies consists of several stages.
Aurora plans to launch a fully commercial driverless service by the end of 2024, and will do so 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 goods.
This relationship will then shift to a driver-as-a-service (DaaS) model, where carriers purchase trucks with Aurora Driver technology on board. These carriers will then offer their services through these trucks to shippers in the Uber Freight network.
“The carrier will purchase the AV truck from the OEM at whatever price it negotiates with the OEM provider and [Aurora] will provide the drivers,” Zac Andreoni, Aurora’s VP of business development, told TechCrunch. “[Carriers] will pay us prices commensurate with how they pay drivers today, obviously adjusted for the value we provide.”
Andreoni noted that the DaaS product comes with Aurora maintenance and support, including access to the company’s command center with remote operators to help get trucks out of difficult situations and back on mission.
Aurora is still a few years away from going to market with the DaaS model.
“The process to get any kind of fleet that wants to buy a truck will take anywhere from a year to a year and a half before they sign the final paperwork for the number of trucks they want to buy in whatever specifications,” Olivia Hu. Uber Freight’s head of autonomous trucking told TechCrunch. “So the sales cycle is actually much longer than that.”
To get those customers in line, Uber Freight and Aurora are launching what they call the Premier Autonomy program this week. The goal is to give carriers an early path to purchase and integrate the Aurora Driver so that when the components are available for purchase, carriers know how to use them and their systems are properly integrated.
“We’re going to start by raising awareness, bringing the fleets to the table, giving them a voice — especially the fleets in our network — and we’re starting to design what it should look like for them when [Aurora’s] ready to launch driver as a service,” Hu said.
DaaS’s time to market also aligns with Aurora’s deal with automotive supplier Continental, which is slated to mass-produce the company’s self-driving vehicle hardware kit by 2027.
