Driverless rival Waymo, Alphabet's autonomous vehicle unit, recently announced plans to launch its own self-driving ride hailing service open to consumers toon, which might be part of the impetus behind Uber accelerating its own plans.
Report says the Google offshoot which specialises in autonomous cars, accuses Uber of using technology stolen from them.
"The automotive industry is being disrupted by technology and Volvo chooses to be an active part of that disruption", Volvo CEO Hakan Samuelsson said in a statement. "Today's agreement with Uber is a primary example of that strategic direction".
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Uber was thrown into disarray earlier this year when Transport for London (TfL) refused to renew its licence to operate in the British capital due to concerns about public safety for passengers and the process of driver registration.
The agreement envisages that the pick-up service will purchase the vehicles over the course of three years beginning in 2019.
No one knows what the future of self-driving cars will look like, or how long it will take to get there.
Uber said it is testing self-driving XC90 models in Pittsburgh, San Francisco and Arizona, and intends to purchase and use specially-modified Mercedes-Benz vehicles as well.
Waymo, the Google self-driving vehicle spinoff, recently announced that some of its self-driving minivans are already running around Phoenix without a human inside; within months, the company is planning on using those fully self-driving cars to launch a ride-hailing service in the city. Uber's $70 billion valuation already puts the group nearly on a par with Germany's Daimler.