Why Driverless Delivery of Goods Is Likely to Arrive Before Passengers
By Keith Naughton and Kyle Stock, Insurance Journal, March 2018
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.”
And no wonder: The potential market is huge. Consumers now favor shopping online to schlepping to the mall, with Amazon.com Inc. alone delivering more than 5 billion packages to its Prime members last year. Automating the arrival of all those brown boxes on front porches would slash shipping costs in half, experts say. That’s why consultant McKinsey & Co. predicts that in less than a decade, 80 percent of all items will be delivered autonomously.
“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.”
