Why Self-Driving Vehicles Are Going to Deliver Pizzas Before People

By Mario Tacher on Mar 19 in Legal News.

In the wait for self-driving technology, cell-phone toting tech bros may have to cede their spot in line to pizzas, Craigslist couches and the mounting ephemera of e-commerce.

The future—at least in the near-term—will not only be driverless, but sans passenger as well.

The early conversations around driverless cars have focused on robot taxis because taking the human driver out of a cab seemed like the quickest path to profitability. But an increasing number of companies—automakers, tech giants, startups, parcel services—are seeing autonomous delivery as the more lucrative venture.

“The revolution in commercial vehicles will come first, then the passenger cars” will follow, said Ashwani Gupta, senior vice president of Renault-Nissan’s light commercial vehicle business. “The moment business people start believing this is going to generate additional revenue and that this is going to be more efficient, then I think they’ll start working on it.”

“The level of interest around autonomous goods delivery has gone up dramatically,” said Asutosh Padhi, a McKinsey senior partner. “The economics will be compelling and it will change consumer expectations in a fundamental way.”

Automated delivery has plenty of advantages over robo-taxis, starting with fewer safety concerns about hauling cargo instead of humans. And unlike ride hailing, driverless delivery is not dependent on the morning and evening rush when cabs are busiest. Delivery demand exists 24/7 and works best in the dead of night when there’s scant traffic on the road. A robot that works almost all the time could cut two-day delivery into two hours. And a utilitarian delivery pod, which doesn’t need seats or creature comforts for occupants, can maximize return on investment.

 “The business potential is so large,” said Daniel Laury, chief executive officer of Udelv, a Silicon Valley startup that began demonstrating driverless delivery of groceries in January. “You’re talking about hundreds of billions of dollars.”

With so much money on the table, the nascent business is attracting the interest of global automakers and tech giants alike. This week, Waymo, the former Google self-driving car project, begins testing autonomous big rigs hauling cargo in Atlanta. Ford Motor Co. just began a pilot in Miami to understand how self-driving cars and vans would deliver pizza, groceries and other goods. Germany’s Daimler AG has shown its autonomous Freightliner Inspiration truck and Tesla Inc. has teased a self-driving semi as logistics companies seek to eliminate human drivers that account for as much as 70 percent of the cost of hauling goods.