BOOM!

Guys, we are in some crazy days right now. Autonomous cars are happening! Announced on Thursday, Uber acquired Otto, the self driving truck company that I reported on before.

There is no word on price or any data regarding the funding of Otto since they were in stealth mode, but Bloomberg has been floating a price around. They said that the target price was close to 1% of Uber’s current valuation, making this deal worth a cool $680 million.

Uber had to do something to advance their autonomous vehicle campaign. They had the necessary maps for the autonomy, but lacked the hardware. Keep in mind that Otto was making their own state of the art LiDAR sensors (used to sense the road and allows the car to “see” to drive) and novel software so that they could equip semi trucks. But don’t think that the trucks are long gone since Uber will be getting 20% of all profits from the trucks if they do go to market.

And the team was just phenomenal. The 91 strong came from Tesla, Google self-driving, and even Apple. Anthony Levandowski, a Co-Founder, left from Google Self-Driving while his partner in crime, Lior Ron, worked on Google Maps. These guys will be integrated into Uber since this talent is just bonkers.

Otto was all about the aftermarket kit, which makes sense since it isn’t as capital intensive if you had to make the whole vehicle yourself. Hmmm, kind of sounds like the business model of Cruise Automation, you know the company that GM bought for $1 BILLION DOLLARS! Kits are where to be in this space.

Many journalists reporting on the sale and I agree on this one major point: Uber bought Otto since it wants to give its drivers the ability convert their cars into autonomous cars. That means that Uber’s vast fleet will start getting equipped with autonomy. Expect to see in the coming years a shift from Uber drivers actually driving to supervisors in the car when it picks up rides to an independent fleet manager role to unemployed since Uber will eventually take over that role when the phaseout is complete.

Oh by the way, Uber also announced that its fleet of Volvo self driving XC90s will be hitting Pittsburgh later this month. Uber and Volvo both shook on spending $300 million total to develop autonomous cars by 2021 and these cars are a result of their work. Rides will be free to spread awareness of the autonomous vehicles.

So, times are changing. Companies, private or public, are snatching up these little startups making their own autonomous car kits left and right. It is really a race to grab up market share because when they are fully adopted, autonomous cars will rule our lives.