A Blog by Jonathan Low

 

Jun 26, 2020

Amazon Buys Self-Driving Car Firm, Suggesting Big Bet On Automated Deliveries

Which makes a lot of sense given what appears to be the lingering impact of the pandemic.

Plus, it's another strategic shot at Google, Uber et al. JL

Jay Greene and Faiz Siddiqui report in the Washington Post:

Zoox would fit into Amazon’s efforts to get goods to its customers more efficiently. For the past seven years, it has aggressively built out an expansive delivery network of planes, trucks and vans to get goods to customers. Zoox is building an autonomous system that includes everything from the artificial intelligence powering the driving to a zero-emissions vehicle to place the software inside and an in-house mobility service. Such a fleet could augment Amazon’s efforts to take on more of the delivery of its packages itself, further reducing its dependence on shipping companies.
Amazon will buy the self-driving technology firm Zoox, expanding its portfolio of technologies to automate the delivery of packages.
The e-commerce giant, which announced the deal in a blog post Friday morning, did not detail plans for how it would use Zoox’s technology. In a statement, the chief executive of Amazon’s consumer business, Jeff Wilke, only extolled Zoox’s efforts “to imagine, invent, and design a world-class autonomous ride-hailing experience."
But Zoox would fit into Amazon’s efforts to get goods to its customers more efficiently. Eight years ago, Amazon bought Kiva Systems, a maker of robotic systems that move goods throughout warehouses, for $775 million. For the past seven years, it has aggressively built out an expansive delivery network of planes, trucks and vans to get goods to customers.
For Zoox, the deal provides a deep-pocketed benefactor to advance its technology.
“We now have an even greater opportunity to realize a fully autonomous future,” Zoox chief executive Aicha Evans said in a statement. She will continue to run Zoox along with company’s co-founder and chief technology officer Jesse Levinson.
Amazon spokeswoman Angie Quennell declined to disclose the financial terms. A Zoox representative referred a request for comment to Amazon.
The Information, a tech news website that first reported the deal, said the retailer would pay more than $1 billion for the company. A month ago, the Wall Street Journal reported that the companies were in “advanced talks” for a deal that valued Zoox at less than the $3.2 billion it achieved in a funding round in 2018.
Zoox, which is testing fleets of autonomous vehicles in San Francisco and Las Vegas, was founded in 2014 and aims to build a ground-up system transforming how people get around cities. The company is focused on building an autonomous system that includes everything from the artificial intelligence powering the driving to a zero-emissions vehicle to place the software inside and an in-house mobility service.

The company has drawn attention for its ambitious goal to master the complex streets of bustling cities in its initial stages, rather than testing in less complicated environments and gradually expanding. Among the array of driverless car start-ups dotting Silicon Valley, Zoox has stood out for its conservative approach to getting to market and its emphasis on safety.
“We’re going to start seeing three to five years where people start actually deploying in cities,” Mark R. Rosekind, the company’s chief safety innovation officer, told The Washington Post recently, “but it’s going to be 20 or 30 years before you start seeing this all over the place.”
Such a fleet could augment Amazon’s efforts to take on more of the delivery of its packages itself, further reducing its dependence on shipping companies. Its relationships with those companies have become increasingly strained as Amazon built out its own logistics operations following the 2013 holiday season, when a surge in sales flooded UPS and FedEx networks and caused some deliveries to be late.

A year ago, FedEx decided not to renew its domestic Express contract with Amazon, the speediest option FedEx offers for shipping via air. Since then, Amazon has leased a fleet of planes, purchased thousands of truck trailers and enlisted entrepreneurs to build out delivery networks across major metro areas.
And last September, Amazon ordered 100,000 fully electric delivery vehicles from Plymouth, Mich.,-based Rivian, a company in which Amazon invested $440 million. Amazon expects to start delivering with those vans in 2021.

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