The robot business is set to boom. Delivery robots are coming over the horizon and in less than a decade we will be sharing our sidewalks with autonomous robots. It’s big business. The global parcel delivery market is worth close to $350 billion, With so much to play for, it’s easy to understand why a robot race is underway.
– $350 billion: the total worth of the global parcel delivery market in 2017
– 85%: The predicted percentage of last-mile deliveries that will be made by autonomous vehicles by 2025
– 20: The number of campuses across UK, US and Germany that will be serviced by Starship delivery robots in 2019
In the delivery robot game, everyone is competing to be the company that will dominate the ‘last mile’. This is the final part of the journey to get the package to the end recipient. It is the most expensive leg of the delivery process where most costs are incurred. It is also the part of the process that is predicted to be dominated by autonomous delivery vehicles in the future — by 2025 85% of last mile deliveries will be made by autonomous vehicles.
The cost-saving potential of autonomous delivery robots is impressive. According to a recent McKinsey report on the future of the last mile, autonomous delivery robots will have costs that are 40% lower than current last-mile delivery methods. The level of cost reduction can lead to both an increase in the profit margin and a lowering of price for the customer.
A number of key companies have been emerging in this space. First out of the gate were Starship Technologies. Initially, they deployed their robots for testing in Washington DC and Redwood City, with Idaho following suit, and even London getting on board. In the majority of cases the Starship robots have been delivering food, but in London the robots were also used by Hermes to collect packages (though not to deliver them). Next, Marble emerged as a new player, partnering with Yelp for their autonomous robots for food deliveries in San Francisco and harbouring ambitions to deliver parcels and packages in the future.
Investors are banking on the robot boom
Now we have new players such as Nuro, Boxbot, Dispatch, Robby and Alibaba joining the fray. All of this buzz is attracting big investment. For example, back in January it was reported that Nuro raised an impressive $92 million in funding for their autonomous delivery robot. It makes sense — when the global delivery pie is so big you’re going to want to fight for your slice of it.
If all goes according to plan, almost everything in the near future will be delivered to its final destination by an autonomous vehicle — packages, groceries, medicine, food. As human beings, we are creatures that love convenience. If something makes our lives easier, it usually gets adopted. So if ordering something and having it delivered by an autonomous robot makes it cheaper or quicker, then we’re going to do it.
As autonomous delivery increases in popularity, we will see more and more delivery robots and eventually they will be as commonplace. Or will they? The presence of delivery robots on the streets of San Francisco has been met with resistance, and at the end of 2017 a number of regulations and restrictions brought strict limits to where and how they can be tested. Executive director of pedestrian advocacy group Walk San Francisco, Nicole Ferrera, wants to take things further and ban robots from the sidewalks completely. Speaking to The Guardian, she said “We really see this as a privatization of the public right of way.” Time will tell if this criticism sticks, and it’s worth remembering that roads were originally used for horses and carts before they were used for cars. We may see the same transition for our sidewalks, with robots becoming the norm.
Jobs may be under threat
Aside from the criticism of the physical presence of robots, others have expressed concern about the loss of jobs that this technology could result in. Numerous delivery drivers and riders could be replaced, which might be good news for the bottom line of a business, but will be bad news for those reliant on this job as a source of income. New jobs such as robot supervisors will be created in this emerging field, but at the moment it’s uncertain what the effect will be on the labour in the long term.
Most recently, Starship announced that they are expanding their operation to take in 20 university or work campuses across the US, UK and Germany by 2019. The fleet of robots will number 1,000. In Washington DC the local government also agreed to extend Starship’s pilot program until the end of 2018. All signs point to growth.
For some people, the mere mention of robots and artificial intelligence is enough to send them into a downward spiral fuelled by dark visions of a dystopian future, with robots holding dominion over humanity and the human race reduced to the role of subservient underlings. Those of a more optimistic disposition see intelligent robots as liberators, relieving humans of all sorts of menial tasks, markedly improving our lives and helping us reach our full potential. Of course, the truth remains somewhere between the extremes and there are reasons for both concern and for celebration. One thing is certain — the robots are coming, and they’re hitting the streets.
This series of articles has been prepared with the support of our partner Viessmann — they celebrated 100 years of their company last year (2017) and are actively involved in positively shaping the next 100 years.