IEEE Future Directions
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As a few (big) companies are working on making self driving cars safe and affordable a few (small) companies are looking at the delivery market with autonomous vehicles.
Nuro has started delivering grocery in Scottsdale, Az, at Fry’s store in partnership with Kroger, the giant food store chain in the US, with a few autonomous vehicles running at a top speed of 40kmh (25mph), charging 5.95$ flat per delivery. Shoppers place orders on the Fry’s website or use the mobile app and can schedule delivery through the day (or book for next day delivery).
The choice of Scottsdale shouldn’t come as a surprise since Arizona is the US state with the most advanced regulation on self-driving cars (and it is also a city where traffic is smoother).
Nuro has been founded in 2016 by two (young) Google engineers with the aim of applying robotics to accelerated the benefits to people’s life (this is their mission statement). Interestingly, their URL is nuro.AI, to clearly emphasise the role artificial intelligence is playing in their business.
You may want to consider this as an image stunt by Kruger, to let people know they are believers of innovation, or a way to get some returns on experiment of advanced technology by Nuro and probably you won’t be that far off. It is unlikely that this delivery service can bring in revenues justifying the business (at least this is my feeling). Once you factor in the operation expenses and the capital investment there is very little space to generate margin.
However, this is just a first step in a path that eventually will change the world and our habits. I share the view of Nuro that it is much easier to address the goods delivery by autonomous vehicles than to address people movement with self-driving cars so it makes sense for a start up to look into this market segment.
Once the business scales up it should be able to generate revenues, particularly as the stores re-engineer their operation, with robots serving the whole delivery chain, from shelf to door.
I remember reading that the FedEx first idea and biz plan was considered unviable and a sure fail. Just look at what FedEx has become and you see that once a business manages to scale up it changes the rules of the game and what seemed to be a no go becomes the way to go.
