Self-driving cars are the talk of the IoT space, and the technology is projected to see serious growth in the coming years. Many organizations, from retailers to local governments, are turning to self-driving technology to help them reach their goals and to get purchases and people to their destinations.
As more merchants harness the potential of self-driving vehicles, the global market size of the technology is projected to grow at a rate of 63.1 percent between 2021 and 2030. Autonomous vehicles can help retailers boost the convenience of their delivery services and reduce their own costs, said Adriel Lubarsky, director of business development for self-driving delivery service provider Udelv, in a recent PYMNTS interview.
“About 65 percent of the cost of last-mile [goods] delivery comes from the driver, and that cost is growing over time,” Lubarsky said.
Other merchants, such as Mercedes-Benz and Bosch, are eyeing self-driving cars for ride-hailing services. The two companies will soon test the technology in San José, California. Jill North, the city’s innovation program manager, recently told PYMNTS that officials hope the service can fill transit gaps and boost ridership.
“We’d like to prove that you can leverage the power of autonomous vehicles to increase transit ridership rather than take away from it,” North said.
Groceries Around the Clock
For Udelv, founded in 2016, self-driving vehicles are all about easing the “last mile” — or final transit leg — of delivery.
The company offers its autonomous vehicle-powered delivery services to retailers and other companies through a subscription service. Clients load their customers’ purchases into the cars’ locked compartments, and customers then use Udelv’s app to track their deliveries. The app alerts customers when their deliveries arrive, so they can unlock the appropriate compartment to retrieve their goods.
Grocery retailers in particular have taken an interest in Udelv’s service. Many retailers expect digital sales — which have historically been a small part of the industry’s business — to surge, and they are readying delivery services to meet the predicted increase in demand.
“They’re preparing for what they expect to be an enormous increase in the amount of deliveries they’ll be doing,” Lubarsky explained.
But Udelv’s solution can also benefit businesses — such as those selling pharmaceuticals, baked goods and auto parts — that want to offer delivery options outside of normal business hours. With Udelv’s self-driving service, companies have to focus only on finding staff willing to load their goods, without worrying about drivers’ schedules.
“A self-driving car doesn’t care what time of day it is, doesn’t care that it’s Christmas or a Sunday,” Lubarsky said. “You can run a larger-scale delivery operation … during that time.”
Self-driving vehicles’ ability to deliver at any time is crucial for Udelv clients like the Second Harvest Food Bank, Lubarsky said. Many people served by Second Harvest hold multiple jobs or have other responsibilities, and often aren’t home to accept deliveries until late in the evening. But most of the food bank’s volunteer drivers are seniors who either can’t or won’t work during those hours, making a supplementary self-driving vehicle service like Udelv all the more valuable.
Autonomous vehicle delivery can offer companies added flexibility in other ways as well. For instance, while companies might be reluctant to ask human drivers to stay parked at their locations for extended periods of time, self-driving cars can remain at their destinations as long as needed to allow customers to pick up goods at their convenience.
Still, human drivers have some advantages, including the ability to place packages on customers’ porches if they aren’t home. To handle issues like this, the Udelv app allows customers to text any of their phone’s contacts, such as a family member or co-worker, with the credentials needed to open the delivery compartment.
Ride-hailing in the City
Since self-driving car projects operate on streets alongside drivers, bicyclists and pedestrians, cities are interested in the data and access that these services can provide.
In California, the city of San José is partnering with Bosch and Daimler’s Mercedes-Benz on the companies’ test of a ride-hailing service that uses autonomous cars. During these trials, which are set to launch in the second half of 2019, some citizens will be able to catch rides from a designated pickup area. The companies’ ultimate goal, however, is to allow consumers to hail the vehicles through an app.
San José’s North said the city is involved in the process and will allow the vehicles to connect with its traffic light system. Instead of relying on sensors to determine whether a light is green, autonomous vehicles would automatically receive information on the light's color, as well as information about other lights in the city — which could eventually help them optimize their routes.
“Almost all 960 of our intersections [traffic lights] can be controlled in real time and are connected,” North told PYMNTS. “From an autonomous vehicle standpoint, we can provide that feed to the vehicle. So now you have a safety redundancy because you have vehicles connected to the infrastructure.”
The city sees the service as a potential transit option for seniors and those who can’t afford their own vehicles. North also predicted that it would increase public transit ridership by resolving train station parking issues, which could push potential train riders to drive to their destinations instead.
The future of self-driving cars is still taking form. But as companies and industries increase their focus on autonomous vehicles, cities and businesses can expect to see more of the technology in the coming years.