"The deal is an extension of an agreement Uber made with Volvo almost two years ago, when the ride-hailing company started its research and development efforts in autonomous vehicles in earnest", the Times explained. Delivery of the vehicles is set to begin in 2019, with Uber calling up vehicles each month through 2021.
Uber announced the Volvo deal Monday, according to The New York Times.
Volvo says that it has worked closely with Uber engineers to help develop the XC90 SUVs that will be used in the program.
Uber's Volvo XC90 self-driving auto is shown during a demonstration of self-driving automotive technology in Pittsburgh in 2016.
Jeff Miller, Uber's head of vehicle partnerships said: "In a self-driving world there is no human, so you need redundant steering and braking and actuation systems, such that if there is an electrical or mechanical failure, the back-up system can kick in".
Miller said Uber will own and operate fleets of its own vehicles purchased from partners like Volvo, but there is no one-size-fits-all approach, so it will also allow other self-driving vehicles on its network.
Uber and Volvo are taking a major step toward putting driverless cars on the road. The company will install its own sensors and software in the vehicles.
"The automotive industry is being disrupted by technology and Volvo Cars chooses to be an active part of that disruption", said Hakan Samuelsson, president and chief executive. Under the new "framework agreement", Volvo will supply thousands of vehicles already fitted with "core" autonomous and safety systems, to which Uber will adds its own self-driving tech.
The purchase highlights the delicate line Uber has been forced to walk as it pursues driverless technology while also trying to keep its current workforce of more than 2 million drivers happy. The potentially massive new investment would change Uber's way of doing business, and make it less reliant on a fleet of contractors.