Fintech North America Spotlight

Inside Silicon Valley: Delivery Bots Thrive During Pandemic

“Robots won’t give you covid”, is a bizarre remark that probably hasn’t crossed most people’s minds – but one that is gaining traction in the delivery industry. As restaurants and grocers scramble to provide contactless service during the pandemic, robots may actually come to the rescue. What was a fringe service before the covid era, has expanded to multiple cities in the US and abroad, with the major industry players reporting exponential growth in the last months.

“We have tripled our delivery numbers since the onset of covid” said Ryan Tuohy, SVP of Starship Technologies. According to Tuohy, the pandemic has accelerated many plans that would have much longer to fulfil. “Some of the projects took only weeks or months, because everyone was in such a hurry to provide contactless deliveries,” he said.

Starship Technologies is one of the biggest in the industry, with a thousand bots roaming the sidewalks in the UK and the US since 2014. Their fleet was already deployed in the Bay Area and London before most of the world went into lockdown. Tuohy claims having all those bots ready, helped hit the gas pedal on some deals that were in the pipeline. One of the biggest ones recently was with Save Mart, a US supermarket chain, which is also helping Starship increase user adoption.

With over 200 stores in Northern California, Save Mart claims to have experienced positive feedback from users when they order via the bot delivery system. “There was an immediate adoption by shoppers of this delivery system,” said Robert Cady, Director of Marketing for Save Mart. Clients loved the bots so much, he said, they rushed to social media to post pictures of their delivery experience.

Kiwibots, whose bright-eyed bots fill UC Berkeley campus, has quadrupled their growth since March. They are expanding their partnerships in the Bay Area, on the heels of the pandemic. “We provide a service that is crucial during these times – a lot of people are afraid to even go outside,” explained Felipe Chávez, Kiwibots founder and CEO. He has also seen user adoption skyrocket during this crisis. People are getting used to sharing the sidewalks with Kiwibots, which are roughly the size of a small fridge. “People really enjoy seeing them around,” Chávez said. Of course, it helps that the robots are equipped with an adorable expression, designed to incite empathy.

Since August, pedestrians in San Jose are really getting an eyeful of the small bots cruising down their streets. The city signed a partnership with the delivery company to operate in the downtown area – which included cooperating with local authorities to identify possible pain points. They can tell if a red light takes too long for pedestrians or if a crossing ramp isn’t wheelchair-accessible. “This could maybe have taken years to fulfil if it wasn’t because of the pandemic,” Chávez explained, “because we fast-tracked through the red tape.”

Piestro, one of Kiwibots recent partners, believes this delivery system is only the beginning of an industry they envision as almost devoid of humans. Piestro is a pizza-making robotic kiosk slated to launch in the coming months in California. “This is the perfect contactless delivery system, where no human touches your food. It will go from the pizza machine to the bot, to the user’s doorstep,” claimed Massimo Noja de Marco, Piestro’s CEO. He foresees an army of robotic food kiosks placed in every neighborhood and a fleet of bots doing hyperlocal deliveries. “We thought we’d launch in two to three years, but the process has only been months because of covid-19,” he said.

Another Bay Area company, Nuro, is also ramping up their partnerships with local authorities. They began a close collaboration in April with the San Mateo county to provide contactless deliveries to covid-19 patients lodged in a response centre. Their R2 bots, much bigger in size than Starhips’ and Kiwibots’, supplied the patients with food and medicines for months.

But where does all this technology leave those who deliver in the flesh? Apparently, more or less in the same situation as they are right now. According to an ongoing study by UC Santa Cruz, bots will barely make a dent in the current delivery job market worldwide. The study, called Delivering insecurity; e-commerce and the future of work in the food retail concludes that at least in the delivery arena, robots will not take our jobs. “At least for the next ten or twenty years,” Chris Benner, professor at UC Santa Cruz and co-author of the research, explained. “Right now, robots are the least of worries for those working in the food delivery business, who deal with very low-quality jobs,” he said.

Starship isn’t concerned either about this possibility. “It’s a very a marginal share of the delivery market,” Tuohy said. That’s because bots can’t compete with human drivers in a car, delivering goods much farther than a robot possibly could. At least up to now. “The robots are very useful for last-mile deliveries, which is precisely what delivery drivers don’t want, because there is no money in it for them,” Tuohy explained.

Many of these delivery drivers work with platforms that have recently come under fire in California for breaking labor laws. If they’re forced to shut down operations in the state, this could be a unique opportunity for bot delivery companies to fill in the gap. Their employees don’t eat, don’t sleep, don’t need to get paid and certainly don’t protest working conditions. Another advantage bot delivery companies have over their human counterparts is the cost of the service for the merchant and the client. Piestro’s Massimo Noja explains that it is considerably lower. “It is really, really, much more competitive. Which makes sense, because if you are doing a hyperlocal delivery, you don’t need the car, which consumes gas and takes a long time to take the food from one side of the city to another”, said Noja.

Author

  • Susana Mendoza is a tech journalist based in Silicon Valley, with a background in broadcast and coding. She reports on startups, finance, science and politics for various international media outlets. She is also a conversation designer (aka robot whisperer).

Related posts

Research Shows Biometric Face Authentication Aids COVID Acceleration of Digital Transformation

Polly Jean Harrison

Voting for The Fintech Power 50 2021 Officially Begins

Gina Clarke

New Rise Insights Report Released on Climate Fintech and the Growing Green Tech Market

Polly Jean Harrison