First-ever self-driving delivery on public roads sees groceries dropped off in Bay Area
Udelv’s autonomous delivery vehicle (with human backup
driver in case of emergency) drives back to Draeger’s market in San Mateo,
Calif., Tuesday, Jan. 30, 2018, after making its initial grocery deliveries.
(Karl Mondon/Bay Area News Group)
By ETHAN BARON | ebaron@bayareanewsgroup.com | Bay Area
News Group PUBLISHED: January 30, 2018 at 12:21 pm | UPDATED: January 31, 2018
at 9:44 am
SAN MATEO — A Bay Area tech company is claiming the
world’s first delivery of goods by a self-driving car on public roads, after
its electric cargo truck carried groceries from the posh Draeger’s grocery
store in San Mateo to two nearby locations Tuesday.
“We’re making history today by reinventing deliveries,”
said Udelv CEO Daniel Laury.
Udelv plans to use its single automated vehicle — which
requires a backup driver as per state law — to start regular deliveries to
customers of the San Mateo Draeger’s store after mid-February. But the
Burlingame company has higher ambitions: It hopes to have 1,500 of its vehicles
on the road by 2021 and it wants to work with major firms involved in delivery
such as store chains, Amazon and UPS, Laury said.
“This new machine is a revolution for retailers, shippers
and delivery companies,” Laury said.
Udelv is targeting a lucrative market — McKinsey in
October put the global cost of package delivery at more than $85 billion. But
considerable obstacles remain for companies scrambling to use road-going robots
to grab a piece of the pie.
For Udelv, technological, infrastructure and regulatory
limitations mean the startup’s technology is more a first step than an ultimate
solution to the problem of so-called “last-mile” delivery from businesses to
consumers, said Gartner analyst Michael Ramsey.
“I love the technology,” Ramsey said. But he added, “I
feel like at this point it’s kind of like … a very complex solution to a fairly
simple problem.”
Instead of a robotic vehicle, a company could just hire
someone for $15 an hour to make five or six deliveries per hour, for a cost of
only about $3 per delivery, Ramsey said.
Actual cost savings could come when regulations allow for
fully autonomous vehicles on public roads with no backup drivers, he noted, but
it’s unclear when the federal and state governments may permit that.
Also, Udelv’s deliveries require the customer to meet the
vehicle at the curb, where they use a mobile app to open the compartment
holding their groceries. That means someone has to be home when the delivery
occurs, Ramsey pointed out.
One possible solution would be curb-side boxes where a
delivery vehicle can pull up and deposit goods, he said.
“Within 10 to 15 years, I expect that kind of
infrastructure change will have to happen in order to make these
autonomous-delivery solutions or even non-autonomous delivery solutions work
better,” Ramsey said.
Udelv’s truck has 18 compartments in four different
sizes, and a 60-mile range, so it can make deliveries to 18 different sites on
one trip, Laury said. Top speed is 25 miles per hour, with a 700-pound carrying
capacity.
In the future, Udelv could transport goods including
pharmacy items; products from hardware stores; and other materials — for
example, tools for a contractor at a work site, Laury said.
“How about ordering beer at 11 p.m. in the evening when
you’re running out of it at a party?” he said.
Draeger’s currently charges $9.99 for grocery deliveries,
but plans to cut that cost to customers as the family-owned business saves
money by using Udelv, said Richard Draeger, a co-owner of the grocer, which
also has stores in Los Altos, Menlo Park and Danville.
Laury said Udelv’s truck costs only 5 cents per mile in
electricity costs, is safer for the public, and more environmentally friendly
than delivery vehicles powered by fossil fuels.
The automated truck will let Draeger’s get groceries to
customers within one to two hours, instead of the next-day delivery available
now, Draeger said.
Udelv’s Laury dismissed the threat from Nuro, a startup
by two former Google engineers that came out of stealth mode Tuesday. It also
uses a custom-built vehicle and is intended for similar local deliveries.
“I’m not concerned at all,” Laury said, adding that
Udelv’s vehicle is much bigger than Nuro’s and could therefore serve different
markets.
Other companies working on automated delivery include
Ford, which in August and September had human drivers delivering Domino’s
pizzas in cars capable of autonomous driving in Michigan. Those vehicles were
not in self-driving mode at the time.
Amazon in July applied to patent an “autonomous ground
vehicle” to bring items from a delivery truck to a home. Starship of Redwood
City and Marble of San Francisco have both used sidewalk robots in San
Francisco to deliver take-out meals, with Marble also eyeing delivery from
pharmacies and grocery stores.
Udelv is counting on rapid growth in e-commerce, which
accounts for only 9 percent of current U.S. retail sales — but is expected to
see 16 to 21 percent annual growth through 2021, according to Statista.
And Laury pointed to McKinsey’s prediction that 80
percent of all deliveries will be done by automated vehicles — including drones
— in the next 10 years.
Former Google, Tesla top execs to develop self-driving
cars with VW, Hyundai
Draeger sees Udelv ultimately cutting in half the grocery
company’s delivery fee to customers — and helping it fend off Amazon, which
last year bought upscale grocer Whole Foods.
“This allows us to compete in a much, much better way
than we ever have in the past,” Draeger said.
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