UPDATED: 4/29/14 10:57 am ET - adds Volvo statement, video
SAN FRANCISCO (Reuters) -- Volvo Car Group and Google Inc. said they have begun testing self-driving cars on city streets, a crucial new phase in the quest to make the technology a standard feature in automobiles.
After several years of testing self-driving cars on freeways, where driving conditions are more predictable, Google in the past year shifted its focus to city-street driving, the company said in a post on its official blog on Monday.
Volvo, in a statement today, said it has begun testing 100 cars on the streets near its headquarters in Gothenburg, Sweden, in a project called "Drive Me."
“The test cars are now able to handle lane following, speed adaption and merging traffic all by themselves," Erik Coelingh, technical specialist at Volvo, said in the statement.
"This is an important step towards our aim that the final ‘Drive Me’ cars will be able to drive the whole test route in highly autonomous mode. The technology, which will be called Autopilot, enables the driver to hand over the driving to the vehicle, which takes care of all driving functions.”
Google said it has driven thousands of miles on the streets of Mountain View, Calif., a small suburban community where the company maintains its headquarters roughly 35 miles south of San Francisco. Google's driverless cars rely on video cameras, radar sensors, lasers and a database of information collected from manually driven cars to help navigation, according to the company.
"A mile of city driving is much more complex than a mile of freeway driving, with hundreds of different objects moving according to different rules of the road in a small area," wrote Chris Urmson, the director of Google's self-driving car project in the blog post on Monday.
"We've improved our software so it can detect hundreds of distinct objects simultaneously -- pedestrians, buses, a stop sign held up by a crossing guard, or a cyclist making gestures that indicate a possible turn," Urmson said.
Volvo and Google are among several companies, including Nissan Motor Co, Volkswagen AG's Audi and Toyota Motor Corp, testing self-driving car technology. Both Nissan and Mercedes-Benz parent Daimler AG say they plan to start selling self-driving cars by 2020.
It is unclear whether Google, the world's No.1 Internet search engine, intends to partner with other companies or develop its own self-driving vehicles.
The company posted a video that depicted how a self-driving car views the world as it navigates.
Google's test cars have logged more than 700,000 miles in self-driving mode since 2009. Google said its cars have not caused any accidents while operating in self-drive mode.
Google said it still has many "problems to solve," including teaching the car to drive more streets in Mountain View, before testing on the streets of another town.
Automotive News contributed to this report.