• Robotaxi
  • Pilot Programs
  • COVID-19

Amazon's Latest Acquisition Points To Automated Deliveries via Robotaxis

Sam Abuelsamid
Jul 07, 2020

Smart Car 3

One of the best funded and most ambitious automated driving (AD) startups has finally given up on going it alone. Amazon's acquisition of Foster City, California-based Zoox is another indication that robotaxis aren’t the best near-term bet for AD technology. Deliveries—especially contactless deliveries—are the way forward.

Six-year-old Zoox had raised more than $950 million in equity and debt as it grew to over 1,000 staff. The company had a dream of developing an automated ride-hailing service with a purpose-built EV. Zoox had hoped to launch a commercial service in 2020, but like many startups in the AD space, it has struggled to raise additional capital, despite having some of the best AD performance.

Guidehouse Insights’ report, Market Data: Automated Driving Vehiclesprojects that goods delivery vehicles will account for as much as 74% of automated vehicles (AVs) through the 2026-2027 timeframe. Robotaxis will account for most of the other deployments, with consumer AVs representing only a small fraction of sales.

Deliveries Surge During Pandemic

Deliveries have become increasingly important during the pandemic as hundreds of millions of people globally have endured extended shelter-in-place orders. A number of AD programs have shifted pilot programs over to deliveries to support medical facilities and the requirements for automated deliveries. In Florida, Beep and NAVYA have delivered COVID-19 test samples and medical supplies to the Jacksonville Mayo Clinic. In northern California, Nuro has deployed two of its automated delivery vehicles at field hospitals, and Cruise has delivered meals and groceries to healthcare workers and those in need.

This shift to goods delivery works perfectly for Amazon, which has struggled to keep up with demand during the pandemic. Over the past several years, Amazon has grown its logistics arm with a fleet of air freighters, long-haul trucks, and local delivery vans to bring deliveries in house. Amazon has also made major investments in electric truck maker Rivian and AD company Aurora. (Aurora has recently shifted its focus away from light duty vehicles toward automated trucking.)

Amazon and Zoox Can Revolutionize Goods Delivery through Robotaxis

The acquisition of Zoox fits Amazon’s larger strategy and will likely lead to the adaptation of the Zoox robotaxi to a mobile Amazon locker for contactless urban deliveries. In this application, Amazon locker users scan a barcode on their phone screen, causing a locker door to open. Each locker can be equipped with ultraviolet light for disinfection.

Delivery routes can be planned and optimized before the vehicle departs. A use case where each vehicle makes 20 to 30 deliveries before looping back to the warehouse could result in far fewer deadhead miles than a robotaxi is likely to encounter, thus decreasing operating costs and congestion. Since these vehicles would be operating in urban areas at lower speeds without passengers, the required safety threshold would be much lower for goods delivery vehicles than for robotaxis. Amazon could also leverage its investment in Rivian to manufacture Zoox vehicles (note: this article is behind a paywall), lower investment costs for Zoox, and ramp up scale for Rivian.

In its announcement, Amazon committed to bringing Zoox’s robotaxi service to market, and as AD technology matures that will likely happen. Amazon certainly has pockets deep enough to fund robotaxi pilots for many years—just not as the top priority. One thing is fairly certain, this acquisition will likely lead to a significant realignment in the AD space with more consolidation and a focus on deliveries.