Mercedes has formed a new alliance to develop robot taxis

Mercedes' parent company Daimler is teaming up with Bosch, the largest auto parts supplier, to develop the software for a self-driving taxi service, Bosch announced in a press release Tuesday.

The alliance will develop the autonomous software before 2025, which will be used exclusively in Mercedes vehicles for two years once it's completed. The ultimate aim is to use the self-driving platform for a taxi service.

Bosch is a public supplier of Tesla's radar sensor for its Autopilot system. In September, Bosch tested its own self-driving car on Australian roads, marking the first time autonomous vehicles have driven Down Under.

Daimler has installed advanced driver assistance features in cars like its Mercedes E-Class and aims to have its self-driving trucks be commercially available by 2020. The company made history when its self-driving truck drove on a public highway in Germany in 2015.

The move shows how traditional auto companies are continuing to collaborate with suppliers and tech companies to get self-driving cars road-ready by the start of the next decade.

Waymo, Google's self-driving-car company, has partnered with Fiat Chrysler on self-driving cars, and there are reports the two will launch a robot taxi service by the end of 2017.

Similarly, BMW has teamed up with Intel and Mobileye to release a fully self-driving car in 2021.