Uber to test delivering food with robots

By Matt McFarland, CNN Business

Uber is the latest company to try delivering food to people’s homes with robots.

The company, which has long claimed that automation is key to its future profitability, is launching two test programs to deliver Uber Eats in greater Los Angeles this month, including four-wheeled robots that roll on sidewalks for short trips as well as self-driving cars for longer distances.

Starting Monday Uber Eats customers will be given the option to have their meals delivered by one of the robots, rather than a traditional human delivery. Customers will receive instructions in the Uber app for how to retrieve their food from inside the robot. The Serve robot resembles a colorful cooler on wheels, with a lid that flips open to reveal a delivery inside. The robot, which will operate in West Hollywood, has headlights that resemble eyes, making it look like something out of a cartoon.

Hyundai sedans with self-driving technology from the company Motional will handle larger orders in Santa Monica, California. The partnership was originally announced in December. Motional is one of the longest-tenured teams in autonomous driving. When previously named nuTonomy, it introduced a limited robotaxi service in Singapore in 2016, and the company began to test autonomous rides with Lyft in Las Vegas in 2018. Motional is owned by Hyundai and the automotive tech supplier Aptiv. It plans to launch a robotaxi service with Lyft in Las Vegas next year.

Orders delivered via the Hyundai sedan will be stored in a thermal container in the back seat, where the customer will retrieve them. Motional will have a human test driver behind the wheel as a safety precaution. Serve Robotics, which operates Uber’s sidewalk robots, will rely on a remote human operator to supervise deliveries.

Uber’s robot deliveries will account for “a very, very small number of our deliveries” in the near future, according to Noah Zych, who leads autonomous mobility and delivery at the company.

Robots could make deliveries more affordable in the long term. Trips that may be unappealing to pay for delivery today, like picking up one’s dry cleaning, could become affordable in the future with autonomous deliveries, he said. (Uber previously developed self-driving vehicles internally but sold its team to the self-driving company Aurora in 2020. Uber remains an Aurora investor and the companies are working together on robotaxis.)

“This is the first chapter of autonomous vehicles doing delivery on Uber,” Zych said. “We see the potential in the future but have to start where we are today.”

Food delivery has become critical to Uber’s bottom line in recent years. Its delivery revenue of $2.5 billion in the first three months of the year matched its revenue from its traditional rides business.

But Uber’s adjusted EBITDA, a profitability metric, is worse for food delivery than ridehailing, which may suggest robots could improve its profitability. Businesses generally like to automate tasks because it can reduce labor costs and improve profit margins.

Companies have long talked of using robots to deliver things to people, but pilot programs so far have been small and typical of the autonomous delivery world that’s long had more sizzle than substance amid technical and regulatory challenges. Companies like Domino’s, Kroger and Amazon have all dabbled in robot delivery in recent years.

Amazon founder Jeff Bezos said in a 60 Minutes segment in 2013 that drone delivery could be available in four or five years. Prime Air publicized its first delivery in 2016, but it has yet to launch a regular delivery service. Amazon still says it is aiming to one day make 30-minute drone deliveries to customers.

Amazon has a sidewalk robot delivery service of its own, called Scout. Public tests began in 2019, and Amazon says it’s delivered tens of thousands of packages in Snohomish County, Washington; Irvine, California; Atlanta, Georgia and Franklin, Tennessee.

They’re a tiny fraction of Amazon’s total deliveries, which amount to billions of packages a year.

Starship, a sidewalk robot company, says it is making 10,000 deliveries a day in 40 locations worldwide, including 25 US college campuses. Its deliveries, which cost an average of $1.99, tripled in 2021, company spokesperson Janel Steinberg told CNN Business.

Starship claims to be profitable in some of its locations, but didn’t say where. CNN Business has not audited its financials to confirm the claim.

George Mason University, one location that Starship has operated at since 2019, says that about 60 robots deliver between 700 to 1,000 deliveries per day from locations like Panera Bread, Starbucks and Blaze Pizza.

Deliveries cost $2.49, plus a 10% service fee, according to university spokesperson Sofya Vetrova. Community feedback has been 95% positive, Vetrova said.

One of the largest players in robot delivery is Google’s parent company Alphabet. Alphabet’s drone delivery company, Wing, says it made 53,000 commercial deliveries in the first three months of this year, a 355% increase from the same period in 2021. Wing operates in Logan and Canberra Australia; Christiansburg, Virginia; Dallas-Fort Worth, Texas and Helsinki, Finland.

Wing declined to say if it’s profitable. Other Bets, a part of Alphabet’s financial statements that includes Wing, reported losing $1.16 billion in the first three months of this year.

Wing spokesperson Scott Coriell told CNN Business that regulations are holding back its technology in the US, and says it’s had more scale and impact in Australia because of the different regulatory environment. The company, like many others, declined to say when it expects robot deliveries to be mainstream in the United States.

“It’s the trillion-dollar question,” said Dave Ferguson, co-founder of the autonomous robot startup Nuro, which is testing delivery with Kroger and 7-Eleven.

The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.