As self-driving vehicles rise to prominence, various companies go beyond traditional transportation, striving to revolutionise niche services, such as deliveries. The latest to develop a different vehicle is a Silicon Valley start-up, called Nuro. Founded by two former lead Google engineers, experienced in Waymo’s self-driving projects, Nuro is trying to design a new type of vehicle.
Autonomous delivery niche
The start-up is completely focused on low-speed, local and last-mile deliveries, such as groceries and take-out. Nuro has identified an opportunity in last-minute deliveries, that can be serviced by its self-driving robots. Last-minute delivery has become a popular trend, particularly with the emergence of autonomous cars, robotics and e-commerce. In addition to automating these services for customers and creating virtuous local businesses, Nuro also tackles environmental aspects, by reducing traffic and related accidents.
Nuro is not a first mover in the autonomous delivery niche. Amazon has recently filed a patent for an autonomous ground vehicle, after considering self-driving robots for delivery projects. Earlier this month, Toyota unveiled its “e-Palette” at the CES in Las Vegas, hoping to create fully autonomous multi-purpose delivery compartments. Starship Technologies already has functional sidewalk-only delivery robots operating in California, Washington, DC, Germany, and the UK.
Moreover, traditional car makers have also partnered with numerous companies, such as Ford Motor Company and Domino’s, disrupting pizza delivery through self-driving cars.
Nuro’s engineers reinvented the vehicle and delivery van. Similarly to Toyota’s e-Palette, Nuro’s current prototype R1, resembles a compartment on wheels. As all autonomous vehicles, R1 is equipped with a platform for the sensor array, consisting of LIDAR, cameras and radars, placed on the roof.
According to Dave Ferguson, one of Nuro’s co-founders, the full software was built from scratch. “There are a lot of components that are shared with general self-driving, and some things that are a bit different.” They “architectured” the vehicle by gearing it towards “passenger-less, goods-only-transportation”.
The interior is customisable and strictly designed for delivery, capable of carrying up to 250 pounds and holding shelves or hanging racks. There are no seats, no steering wheels, foot pedals and gear shifts. When released, R1 will be a remotely operated robotic vehicle, pioneering real-time teleoperation.
Even if you have the perfect self-driving vehicle, if someone pops out between two parked cars and it’s within your stopping distance, you can’t prevent that accident. Whereas if you have a vehicle that’s half the width, and you’ve got an extra three or four feet of clearance, you can avoid it… and you have room to manoeuvre around them. You can better design the vehicle to mitigate the severity of any accident.
The founders also considered building an R1 prototype that would drive on sidewalks, but eventually opted for a road version. As ti stands currently, the vehicles is approximately as tall as, and thinner than a typical SUV. The latter is a significant advantage, as a width of only 3.5 feet, enables a safety “buffer” around other vehicles and pedestrians. Its delivery pod weighs around 1,500 pounds, with the majority of the mass contained in a battery pack.
However, there are serious challenges, such as signal latency and routes optimisation, currently being resolved by the start-up. Nuro has already received a permit from the California DMV and is planning to test its vehicles later this year. In order to complete a nation-wide launch, it will need approvals from the US National Highway Traffic Safety Administration, especially in states where regulations prevent complete autonomous driving.
Business model challenges
Even though the founders have a perfect design for the vehicle, the business model for Nuro’s delivery utility is somewhat flawed. There are some uncertainties regarding the customers’ acceptance of deliveries from a driverless box on wheels. Ferguson has stated that they will use an app to inform customers of a delivery arrival in front of their building or in their driveway. All delivery items could be retrieved with a code that opens the vehicle’s side hatches, while facial recognition technology is being considered.
Nevertheless, Nuro’s founders are capable engineers with leading experience in self-driving projects at Google. Jiajun Zhu was among the founding engineers of Google’s self-driving team, working as a principal software engineer from 2008-2016. Dave Ferguson joined from the Carnegie Mellon’s Robotics Institute in 2011, and was collaborating as a principal computer-vision and machine-learning engineer.
They both left Google with the departure of the Chief Technology Officer, Chris Urmson, who went on to create his self-driving company, Aurora. Since then, Ferguson and Zhu started Nuro in late 2016, increasing their team with employees from Google, Apple, Tesla, Waymo and GM.
So far, Nuro has successfully conducted two fundraising rounds, led by Banyan Capital and Greylock Partners, collecting $92 million. While focused on delivering goods, Nuro is also negotiating potential partnerships with numerous retailers and delivery providers. Going forward, it is likely to expect acquisition pressure from large players.
Ferguson believes that “almost all of the big players in self-driving passenger transportation are really, really focused on that application because for many of them it’s an existential threat. And most of them feel that goods transportation is going to be a follow-on application.” Nuro tackled goods transportation as an “important enough problem and one that could make real headway on earlier than passenger transportation”.
It makes sense for them to be focused on that, but it also leaves open a pretty big opportunity to go after this other area.