Delivery Robots in the Food Industry Are Employement-Ready
A morning walk in Los Angeles presents a typical scene: sunshine, palm trees, health enthusiasts, and now, frequently, oversized mechanical beings on the sidewalk, serving breakfast burritos. Delivery robots have seen a notable rise in numbers over the years, making Los Angeles a popular playground for their application.
Serve Robotics manages a delivery program in Los Angeles, boasting partnerships with Uber Eats and plans to deploy as many as 2,000 robots in different markets. Coco, with notable backing from Sam Altman, the CEO of OpenAI, has completed over 400,000 deliveries for numerous merchants in various locations. Starship, distinct from SpaceX's rocket, has carried out over 8 million deliveries across 100 service zones, including urban areas, campuses, and industrial sites.
Utilizing autonomous vehicles for food delivery comes with its set of hurdles, primarily motivating merchants and customers to perform the additional tasks involving loading and unloading packages. The further the vehicles are from merchants or customers' homes, the less pleasurable the experience becomes. Delivery robots, with their compact structure, excel in this regard. They can park near the doors of restaurants and customer dwellings, making the distance a crucial factor for user satisfaction.
Customer satisfaction isn't the only area where delivery robots shine. They are significantly more affordable to build and develop compared to autonomous vehicles, with hefty price tags of hundreds of thousands of dollars. Delivery robots, on the other hand, cost thousands to tens of thousands – an advantageous price point for commercialization. Moreover, teleoperation, allowing operators to remotely control them, reduces the need for extensive autonomous capabilities, resulting in lower R&D costs and potential worldwide labor availability.
Delivery robots contribute to easing city congestion by shifting some vehicle traffic to the sidewalks. As Serve Robotics puts it, "Why transport 2-pound burritos in 2-ton vehicles?" By using sidewalks, robots are spared from the caprices of traffic, resulting in faster deliveries, especially in densely populated urban environments – Serve boasts a 95% on-time delivery rate compared to 83% for traditional couriers. Environmental advantages and reduced congestion are associated with the use of delivery robots. However, there are concerns about the impact of delivery robots on pedestrian walkways as their use scale up – crowded pathways could be a reason for regulatory opposition, as observed with micromobility companies like Bird and Lime.
Delivery robots face challenges when it comes to completing long-distance deliveries. Starship Technology's robots operate at a maximum speed of 6km/h (around 3.7 mph) – almost pedestrian pace. Even a 2-mile delivery could take up to 30 minutes to reach its destination. While in theory, delivery robots could manage longer deliveries, clients' patience for such delays may be limited, leading to cold meals upon arrival.
In theory, delivery robots have the potential to lower delivery costs; however, whether the overall market for short-distance deliveries will be large enough to support a business in the long run remains an open question. Delivery robotics companies seem to be recognizing this risk. Serve Robotics acquired Vebu, a food robotics company that collaborated with Chipotle to create the Autocado, an avocado-processing device. Cartken raised an additional $10 million to expand its offerings beyond sidewalk delivery to indoor mobility within factories and industrial sites.
As the lone publicly traded delivery robotics company, Serve provides invaluable insights into delivery robot economics. In Q3 of the year, they reported $221,500 in revenues, with approximately $180,000 from delivery and branding services, supported by an average of 59 daily active robots. Assuming Serve can deploy 2,000 robots and maintain their current revenue of $3,000 per robot, they would generate $6.1 million in revenue per quarter. However, even a larger fleet wouldn't be sufficient to cover their $8.3 million operating expenses in Q3 – a challenge likely driving Serve to explore other opportunities and acquire companies like Vebu.
The Vebu acquisition could seem like a considerable departure for Serve, but the delivery and kitchen robotics sectors share numerous synergies. Serve already boasts sales channels to tap into the restaurant industry, and integrating with restaurant ordering platforms like UberEats is part of their existing technology. Vebu focuses on automating food preparation, and by leveraging Serve's technology, they can link robotic operations in the kitchen to signal when orders arrive at restaurants. While the food delivery market is projected to reach $350 billion in the US by 2024, the restaurant sector is even larger, with 2024 sales expected to surpass $1.4 trillion in the US. Perhaps the future of food delivery depends less on delivery robots and more on robots that prepare meals in kitchens.
In an effort to expand its services beyond food delivery, Serve Robotics, the robotaxi company's subsidiary, has recently acquired Vebu, a food robotics firm known for its collaboration with Chipotle to create the Autocado. This strategic move could pave the way for Serve to integrate robotics into kitchen operations, which is estimated to be a larger market than the food delivery sector, with projected 2024 sales of over $1.4 trillion in the US for the restaurant sector.
With the increasing popularity of food delivery services, Serve Robotics aims to deploy up to 2,000 delivery robots in various markets, boosting their capacity to handle multiple orders simultaneously and reducing the need for costly autonomous vehicles for short-distance deliveries. These delivery robots, equipped with teleoperation capabilities, can park near restaurants and customer dwellings, minimizing the distance travelers have to walk for pick-ups or deliveries, thereby enhancing user satisfaction.
