Uber's self-driving trucks have been hired to deliver freight in Arizona

Uber’s self-driving trucks are now delivering commercial freight in Arizona, the company announced on Tuesday. This marks the beginning of the company realizing the ambitions it laid out when acquiring self-driving trucking startup, Otto, in August 2016.

Uber’s acquisition of Otto has not been without its roadblocks, however. Most notably, there was Alphabet’s lawsuit against the company over the acquisition, something Uber CEO Dara Khosrowshahi said, when he agreed to settle the suit, could have been handled better.

But, as Recode first reported, there was also tension within the self-driving department over which of Uber’s two autonomous efforts took priority — was it the cars or trucks? Staffers who joined Uber as part of the Otto acquisition worried trucks would take a back seat to Uber’s original driverless ambitions of building cars to be used in its ride-hail network.

While former Uber CEO Travis Kalanick said he wanted to acquire Otto as a means to hire one of its co-founders, Anthony Levandowski, Levandowski’s partner Lior Ron testified during the Alphabet lawsuit that being able to develop driverless trucks was non-negotiable. In fact, he decided to sell the company to Uber, instead of staying at Alphabet or selling to Lyft, because it was one of the few places that was open to creating a driverless trucking service.

Though Uber has spent the better part of its driverless PR efforts on promoting its semi-autonomous Volvos, it appears its driverless trucking efforts are a bit further along. It’s not because the trucks are more technically capable of driving autonomously than the cars — in fact, driving autonomously on the highway as these trucks are doing is much easier than driving on city streets — it’s because Uber has actually managed to commercialize the trucks.

The company wouldn’t specify how many self-driving trucks were operating in Arizona nor how many companies it was working with or the number of shipments that have been delivered. Uber simply said its self-driving trucks had performed “thousands” of rides since the beginning of the year, a “significant portion” of which have been in autonomous mode.

So it’s impossible to tell how much money the company has made from the shipments they’ve delivered with these trucks, and it’s likely it’d be a drop in the bucket compared to how much Uber has spent and will continue to spend on developing, retrofitting and owning the trucks.

But, it is one of the first few examples of a company actually commercializing autonomous vehicles as a service. Uber isn’t alone in the space, however. In fact, trucking startup Embark beat the company to the punch and started shipping Frigidaire refrigerators between Texas and California late last year.

Uber is beginning to operate — in however small a scale — what could be an interesting new revenue stream for the company. Creating the foundation for that is not exactly an inexpensive endeavor, however.

Uber has been building out the logistics end of its trucking service, called Uber Freight, and officially launched the platform in May 2017. It essentially operates like an Uber for freight wherein the company matches commercial shippers with truck drivers looking for a job.

So, as there is for its autonomous cars with the existing ride-hail network, there is a built-in path to market for Uber’s autonomous trucks. As many industry experts have predicted, autonomous trucks may hit the road in a meaningful way much faster than passenger vehicles, largely because teaching software how to drive on the highway is much easier than teaching software how to drive on local streets where there are many more variables.

That’s why the trucks will hand control back to the driver when exiting the highway or freeway. In fact, the vehicle operator will have full discretion over when to engage and disengage the autonomous technology on the highways — just like in Teslas.

That means there’ll still be drivers in the mix.

“We are not even looking at what it would take to operate a self-driving truck on busier city streets,” Uber spokesperson Sarah Abboud told Recode. “The highly skilled truck drivers out there today are going to facilitate these short-haul routes now and in the future.”

Each of these drivers have commercial licenses but must receive extra training to be able to operate the autonomous truck. Today, the company needs three drivers for a single long haul.

The way it works is after a shipper posts a job on the Uber Freight marketplace, an assigned driver will pick up the freight from the shipper in a conventional truck. That driver then goes to a dedicated location, called a transfer hub, that Uber has set up where the shipment is transferred to a self-driving truck.

Then a trained autonomous vehicle operator drives the long haul portion of the trip to another transfer hub close to the destination. Here, a third driver picks up the trailer in a conventional truck and delivers the shipment to the final destination.

Uber currently owns the trucks but may partner with another company to bring the trucks to market in the future. While it’s a potentially significant move for Uber, the ride-hail company will have to compete with a number of major players operating in the space like Tesla and Alphabet’s self-driving arm Waymo, as well as newer players like Embark.

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