Uber swallows self-driving truck startup Otto for $680 million

Ride-hailing giant Uber announced on Thursday that is has acquired Otto for approximately $680 million.

All of Otto’s team, which includes ex-leader of Google’s self-driving project, Anthony Levandowski, will move to Uber. They will work on the company’s self-driving project and report directly to CEO Travis Kalanick.

Otto’s research facilities in Palo Alto and San Francisco will continue to operate, and will share data with Uber’s Pittsburgh research center.

The acquisition price, at the time of writing, is calculated at $680 million by Bloomberg. That’s the value of slightly less than one percent equity in Uber, which Otto investors will receive. Uber will also provide 20 percent of the profits from its future trucking business, giving investors a long term reward for the acquisition.

Otto was not planning to build its own trucks, instead utilizing the current big rigs and installing a self-driving system inside. The startup has built its own sensors, including a LiDAR sensor, which is a useful radar tool for self-driving systems.

“Together with Uber, we will create the future of commercial transportation: first, self-driving trucks that provide drivers unprecedented levels of safety; and second, a platform that matches truck drivers with the right load wherever they are,” said Otto in a blog postconfirming the acquisition.

Uber wants control of entire transport industry

Uber has been investing heavily into new transportation sectors in the past year, including food and commercial delivery. Long haul trucking might seem like a huge step for the private firm—valued at more than $60 billion—but it is just another move to make Uber the de-facto brand for all types of transport.

The acquisition announcement came a few hours after Uber and Volvo announced a $300 million investment into self-driving. Volvo will provide 100 SUVs to the Pittsburgh research center, which will be deployed on the roads by the end of the month.

Columbus’ smart city win may lead to autonomous trucks

The Department of Transportation declared Columbus, Ohio the winner of the Smart Cities Challenge earlier this year. Now, city leaders plan to spend some of the $50 million reward on an autonomous “truck platoon” capable of driving in urban areas.

Columbus Region Logistics Council backed the project, which will test the autonomous trucks at Ohio State University before bringing them onto public roads, before moving to Alum Creek Drive.

It is one of a number of public-private partnerships that Columbus is embarking on as part of the Smart City challenge.

City leaders will work with the private sector to build a smartphone app connected to the trucks, which lets them commandeer the vehicle and provide the most efficient route. At the start, a driver will be stationed inside the truck, and the vehicles can only drive on certain roads.

Columbus sees multiple routes

From there, Columbus hopes to build fully driverless trucks that are able to drive on multiple routes without trouble. That could reduce the cost for the logistics industry, while also improving productivity, since self-driving systems don’t need to sleep.

It is one of the first public-private autonomous partnerships, in San Francisco and Michigan almost all self-driving tests are conducted by automotive or tech firms spending their own income.

Most of the talk on self-driving fails to mention the trucking industry, but manufacturers like Mercedes-Benz, its parent Daimler, and startup Otto are already building fully driverless big rigs that may hit the market before consumer vehicles.

Verizon buying spree continues with logistics firm Fleetmatics

Shortly after its massive deal for Yahoo!,  telecommunications giant Verizon has acquiredfleet management firm Fleetmatics for $2.4 billion, it announced on Monday. The purchase is aimed at bolstering Verizon’s push into the Internet of Things (IoT) market.

It comes just one week after the cellular giant’s $4.8 billion purchase—which could rise to over $6 billion when taken altogether—of Yahoo’s core business.

Fleetmatics is one of the largest providers of fleet management tools, which include location, fuel, and speed data on trucks. With this data, the firm says it can improve performance and safety of drivers in the fleet.

Negotiations between the two companies started in May. Verizon received confirmation from its board soon after and a deal was agreed two months later. That is quick for Verizon; the company usually spends a few months deliberating a deal before making a decision.

We don’t know what Verizon intends to do with Fleetmatics once the deal is complete. It could remain independent of the Verizon brand or join the IoT unit, which is growing at a faster rate than Fleetmatics.

Verizon adds to fleet management depth with deal

This is Verizon’s second fleet management acquisition in 2016. The first happened in June, when Verizon acquired Telogis for an undisclosed amount. Telogis provides fleet management solutions to AT&T and its partner General Motors, so the acquisition was seen as a way for Verizon to profit from AT&T’s IoT success.

The carrier’s IoT unit made over $500 million in 2015, but Verizon said in October 2015 that it was not satisfied with the speed of growth. Since then, the strategy has changed to give partners more access to its platform and let them work on implementation of applications.

This is similar to the way IBM or Amazon Web Services works. Instead of providing the entire platform, the ThingSpace cloud product gives developers and enterprise clients tools to build what they want.

Will self-driving trucks really drive the autonomous market?

The next few years could see vehicles of all shapes and sizes, from Google’s current prototype car to Class 8 trucks, move from human drivers to computer algorithms.

Daimler, the parent company of Mercedes Benz, has already started testing its semi-truck in Nevada and Germany. Volvo and a Volkswagen subsidiary are also testing autonomous trucks in Europe, with Volkswagen’s managing over 2,000km without taking over control.

The freight business relies quite heavily on trucks, the provider of more than half the shipments in the United States, according to Wired. Bringing self-driving into the mix might be a blessing and a curse, as it might with all industries.

Autonomous trucks will reduce accidents on the road and might allow truckers — an industry that has a 90 percent labor turnover rate — to watch movies or read books instead of constantly watching the road, which might lead to a lower turnover rate.

But that short-term advantage for truck drivers will be lost once regulators let autonomous trucks drive on the road without a human inside. That is bound to bring a swift end to the freight business, at least for drivers.

Electric trucks another innovative step

Autonomous functionality is not the only innovation coming to trucks in the near future. A Salt Lake City-based startup, using the first half of Nikola Tesla’s as their brand name, has announced plans to launch a Class 8 electric truck, named the Nikola One.

This is not like other electric vehicles however, it features a turbine that continues to power the car, making it self-sufficient. If it happens to turn out of juice, it has a fuel agnostic car that accepts natural gas, making it the safest and cheapest car to run on the roads.

Nikola Motors promises a 1,200 mile range and 1 million miles of free fuel, though the latter might be a promotion for the first few hundred buyers.

It also plans to utilize self-driving systems in the future to improve fuel efficiency.