Barclays Says Drones and Robots Could Cut Food Delivery to $1

Robots and drones could reduce food delivery costs to as little as $1 per order.

That’s according to a new analysis from Barclays, cited in a report Wednesday (April 15) by Reuters. It notes that companies like DoorDash are working with autonomous delivery operators, mainly through sidewalk delivery robots (SDRs) and drones, something Barclays said indicates a “clear strategic shift.”

Autonomous delivery costs now range from $5 to $7 per order in early adoption markets with steeper labor costs, the analysis said, which is $3 to $4 less than standard delivery. In the long term, those costs could come down to $1 per drop, which suggests potential savings of $8 to $9, compared with current rider deliveries in higher-labor-cost areas, the report added.

Using the figure of $4 savings per delivery at long-term penetration levels, Barclays projects robot/drone delivery could yield around $16 billion in yearly profit for food delivery platforms.

The bank calculated that autonomous delivery penetration is now still in its infancy, less than 1% of delivery orders using this method. The analysis forecasts that figure to climb to 2% by the end of the decade and then to 10% within five years.

Among the companies testing the use of robots and drones is Uber Eats, which last year launched a partnership with Starship Technologies to begin rolling out autonomous sidewalk robot delivery in the U.K., Europe and the U.S.

Weeks earlier, DoorDash and Serve Robotics teamed to roll out autonomous robot deliveries across the United States, beginning with Los Angeles.

PYMNTS spoke last year with Serve Robotics CEO Ali Kashani, who said he foresees a future where robots bring more than just take-out meals to people’s doorsteps.

“There are a lot of things you can deliver,” he told PYMNTS. “Imagine medications, pharmacy [items], parcels, groceries.”

He also envisioned the use of robots offering “reverse logistics,” dealing with product returns for customers, along with their involvement in local commerce: Picking up clothing or shoes from local stores and bringing them to shoppers to try them on. Customers would keep the items they want and put the rest back in the bot to return.

“There’s a lot of other things we can do with these robots once they’re out there,” Kashani told PYMNTS. “They’re making the cost of last mile substantially lowered.”