Allen Richards' Blog: Why Your Next Uber Ride Might Be in a Mercedes-Benz S-class

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-A major part of the on-demand ride-hailing app Uber’s claim to fame is its purported ability to undercut the prices of your local taxi service. Of course, there are upmarket options if you’re feeling fancy, like UberBLACK, which charges more for a roomier, more luxurious ride. But according to a report, Uber might be planning on going way, way fancier, by purchasing 100,000 examples of the Mercedes-Benz S-class sedan.

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Reuters reports that Uber has placed a long-term order with Daimler to the tune of “at least 100,000″ S-class sedans. That, fair reader, is a car that costs something like $100,000 each, making this potentially a $10 billion deal.

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Of course, Uber is probably able to take advantage of some kind of fleet pricing incentive, but still—even if the ride-hailing startup is getting the cars at half price, that still totals out to a $5 billion agreement.

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Which leads to a question: Why does Uber want all those Mercedes sedans? Reuters indicates that Uber has been shopping around intending to place a large order for fully autonomous cars; this report from German news outlet Der Spiegel mentions that Uber founder Travis Kalanick was interested solely in self-driving cars. If that’s the case, Uber might be disappointed by the Mercedes flagship, which currently is only capable of short stints of semi-autonomous driving. It’s projected that a fully autonomous vehicle won’t be ready until at least 2020, whether it’s built by Mercedes or another automaker. A timeline for the alleged 100,000-car purchase has not been revealed, although it’s assumed that the agreement covers several small-scale purchases over a stretch of time. Mercedes currently sells about 100,000 S-class sedans annually.

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The transaction was revealed to German news source Manager Magazin by sources at both Uber and Daimler, but neither company was willing to comment to Reuters on the matter, although the original Reuters report now contains an update from a different inside source denying that the deal has been reached.

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Uber’s interest in autonomous vehicles is easy to understand: Despite its astounding market valuation, Uber has never turned a profit, burning through money at an astonishing rate. Eliminating human drivers would remove Uber’s only real cost, paying its contract drivers. Hence why founder Kalanik famously said he’d buy every car Tesla made if they were fully autonomous.

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Until then, don’t be surprised if you hail an Uber and a brand-new S-class arrives.

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A version of this story originally appeared on Road & Track.