California Startup Plans Fully Autonomous Last-Mile Delivery Vehicle Demo

January 11, 2018 by John O'Dell

The next big thing in package delivery by autonomous vehicle could be purpose-built vans loaded with fashions from shops at the local mall, electronics from e-retailers around the globe and groceries from neighborhood purveyors.

That’s the kind of proposition Northern California startup Udelv plans to unveil Jan. 30. Its self-driving van will bring consumers food and kitchen goods from the high-end Draeger’s Market chain in the Bay Area city of San Mateo.

It will be the first public on-road test of a fully autonomous local delivery vehicle. There will be a state-required “safety driver” on board ready to take control if the autonomy system fails.

Udelv, a 2-year-old, 30-employee company with a handful of prototype vehicles operating on an autonomous driving system developed in-house, certainly isn’t a household name in either the delivery or autonomous vehicle industries.

Daniel Laury, Udelv’s co-founder and chief executive officer.

Daniel Laury, Udelv’s co-founder and chief executive officer.

But the company has conducted analysis that shows how its autonomous delivery vehicle can cut delivery costs in half, a feat Udelv Chief Executive Daniel Laury claims the company will achieve.

That would represent substantial savings, as last-mile deliveries typically account for 50 percent or more of total delivery costs and represent a multibillion-dollar industry, according to transportation industry researchers at the University of California at Davis.

If the company can deliver on Laury’s promises, it could become an instant leader in automated last-mile delivery, according to several industry analysts who spoke with Trucks.com.

“This will be a major achievement if they can perform,” said Steve Banker, vice president of supply chain services at ARC Advisory Group in Boston. “There are significant hurdles” in achieving the level of vehicle autonomy Laury is claiming for Udelv, Banker said.

“I didn’t think we’d get to that level in urban areas anytime soon,” he said.

The last-mile delivery market is huge, and a fully autonomous vehicle such as Udelv describes would be a “big help in reducing labor costs,” said Cathy Roberson, an analyst for global logistics research company Logistics Trends & Insights.

Udelv was founded specifically to develop an autonomous delivery vehicle for last-mile service, Laury told Trucks.com. He would not discuss particulars of the vehicle or its operation ahead of the Jan. 30 demonstration.

He did say that the vehicle is all-electric and will operate in a 15-20-mile radius. There will be no operator on board when state and federal regulations eventually allow commercial use of driverless vehicles.

Ashkat Patel,

Ashkat Patel, Udelv co-founder and chief technology officer.

Udelv’s autonomous driving system was developed by a team led by co-founder and chief technology officer Akshat Patel, a former Apple Inc. special projects engineer. Patel also worked on the autonomous driving program at Tesla Inc.

The vehicle also will be capable of making multiple delivery stops in a single run if the customers are close to one another, Laury said.

Unclear is how Udelv plans to handle the task of getting goods from the van to the customer’s door. Udelv’s initial model that delivered for the grocery industry was based on the idea that customers waiting to receive shipments of food typically are at home, Laury said.

That seems to expect that customers would go to the van to get their goods — following a model outlined in a 2016 McKinsey & Co. last-mile delivery study proposing autonomous vans with individual lock-boxes to keep delivery shipments separate and secure.

Laury didn’t say whether the Jan. 30 demonstrations will be a one-off event or is the kick off of a longer-term test program involving deliveries for one or more of the four stores in the Draeger's chain.

Industry analysts are intrigued by Udelv’s initial announcement, but the lack of detail raises a lot of questions.

Udelv’s autonomous last-mile delivery vehicle might represent a major achievement, but it doesn’t appear to resolve the issue of getting goods from the delivery van in the street to a customer’s doorstep, Banker said. “You can’t build a sustainable delivery business model expecting all your customers to be able to go out and pull their packages off the truck.”

Udelv may have an autonomous delivery vehicle and there may be applications, “but Amazon has a huge interest in cutting delivery costs and enormous resources, and you’re not hearing from them on this type of system,” said Michael Ramsey, autonomous vehicles analyst with research firm Gartner Inc.

Automation has to make sense, and if you are relying on the customer being at home, then you have a pretty limited customer base,” Ramsey said.

The difficulties of achieving full autonomy for driverless vehicles in urban areas is enormous, said Michael Baudendistel, a transportation and logistics industry analyst with Stifel Equity Research.

“One of the final transportation functions that will be disrupted by autonomous driving is the last mile,” Baudendistel told Trucks.com.

“The last mile is among the most service-intensive portions of transportation,” Baudendistel said.

“Additionally, autonomous driving is an exponentially greater technological challenge in dense urban environments when vehicles have to negotiate pedestrians, heavy congestion, merging lanes, interpreting police instructions, readings signs and construction,” he said.

Laury said he’s confident Udelv’s system can handle the environments for which it is designed. The initial test will take place outside of the super-dense environment of San Francisco proper. It will instead be in the more suburban area on the Peninsula, a few miles south of the city. Although San Mateo is still crowded with dense traffic.

After completing its tests and refining a market-ready autonomous delivery vehicle and operating system, Udelv envisions its main business as supplying vehicles and software to large delivery companies such as UPS and FedEx. Together with the U.S. Postal Service, they now dominate the last-mile delivery market.

Smaller companies could rent or lease vehicles — or even space on vehicles — if purchasing an autonomous delivery van were out of budget, he said.

“Our business model is to be one of the first real-world applications of autonomous driving” and to “generate money with autonomous driving” by delivering cargo, Laury said.

Read Next: Navistar CEO to Tesla: We’ll Have More Electric Trucks Than You

2 Responses

  1. Mi

    Much like when we built missiles, the company got rid of highly paid master machinists, and replaced them with huge automated systems that still needed a human to load the raw material and remove the finished missile components. Difference was the disappearance of forty $25 – $40 an hour jobs, with the replacement of thirty $10 – $15 an hour jobs, in another state . . .
    Does Trumpka know what is brewing with this technology? ? ?

    Reply
  2. Younggi Song

    It will make new service model to small and mid size shop to this delivery but not limited to this kind of service, need to see the next step and impact from customers

    Reply

Leave a Comment

Your email address will not be published.