Udelv Drives Forward With Autonomous Delivery Vans, Expands Service

October 18, 2018 by John O'Dell

After nearly a year of real-world testing, autonomous delivery van company Udelv is adding customers to its California client list and has a deal to sell 10 of its self-driving vans to an Oklahoma City grocery chain.

It’s also proving that self-driving vans can deliver goods safely.

Over the last nine months, the first two bright orange Udelv electric delivery vans have made more than 1,000 deliveries in several San Francisco Bay Area communities without a single incident, Adriel Lubarsky, Udelv’s business development director, told Trucks.com.

The vans have avoided collisions on the area’s often-crowded streets. They have not run out of power halfway through a trip. No packages have been stolen from the vans’ electronically locked storage compartments. There were no missed deliveries.

“It’s been going very, very well,” Lubarsky said.

Winning the new Oklahoma business and navigating months of real-world experience without mishaps represent milestones for the company, said Cathy Morrow Roberson, an analyst and founder of Atlanta-based Logistics Trends & Insights.

“I take my hat off to them, it’s looking more and more promising,” she told Trucks.com.

Roberson was among several analysts who voiced concerns about Udelv’s business model when the company began its delivery tests in February.

Logistics experts voiced skepticism that Udelv, a driverless delivery service that requires customers to unload their own packages from the van, could compete with mainstream delivery companies. UPS and FedEx, for example, drop parcels on customers’ doorsteps.

For the grocery business, though, it works well.  Most people who are ordering home-delivered groceries don’t want the food sitting on their doorstep all day. They arrange for delivery when they are home, Lubarsky said.

Udelv has signed several Bay Area flower shops, auto parts stores, pharmacies and a bakery since launching with its first client — the San Mateo, Calif.-based Draeger’s Market chain.

Udelv has learned that not all of its company planners’ initial assumptions about the business of making deliveries in a driverless vehicle were correct, Lubarsky said.

The Udelv system works entirely through smartphone communication, initially only via the Udelv app. When the van arrives, the customer uses the app to send an unlocking code to open the secured delivery compartment.

“We initially assumed that if a person used our app to place an order, then it would be that person who received the order, so communication was through that person’s smartphone,” he said.  But sometimes it’s one person who places an order and another who’s home — with a different phone — to receive it.

Now the system has been modified to allow customers to share access to the unlocking code.

“We also found that some people just weren’t downloading our app. They’d place their order via text,” Lubarsky said. That forced them to call the Udelv service line to get the unlocking code when the van arrived.

The company now has a method for unlocking the compartments via text message for people without the Udelv app, he said.

Udelv also is developing an “electronic visual signature” system that will enable pharmacies to use its system to deliver prescriptions that must be signed for in the pharmacists’ presence.

Clients are discovering that autonomous delivery also has some people-based hurdles, said Armen Gasanyan, chief executive of Delivery Guys, which handles Draeger’s manned deliveries and oversees the autonomous deliveries for Udelv.

“Many of our older customers say they prefer to be able to talk to a driver, and some aren’t comfortable using the app, so it’s mostly younger people who are repeat customers,” Gasanyan told Trucks.com.

California law requires a human back-up driver in autonomous trucks, so Udelv supplies one as part of the cost of testing and perfecting its system. But the drivers aren’t supposed to interact with anyone except police or safety personnel if the occasion arises.

It also is difficult to make deliveries in the rain — people hate getting wet retrieving their groceries. Others can’t use the service because they aren’t mobile enough to go out to the van, Gasanyan said.

But after running more than 400 Udelv deliveries for Draeger’s, Delivery Guys has found that the autonomous service has increased its workers’ productivity. It is especially efficient serving office complexes and college campuses, where one delivery run takes care of multiple orders.

In several large complexes, a Udelv van packed with Draeger’s grocery orders parks one evening a week from 4:30 to 5:30 p.m. and serves as a “mobile locker” for customers who work there, Lubarsky said. The record is 13 deliveries in one stop, he said.

Office workers leaving for the day stop by, send their codes by phone to unlock the proper compartment and grab their fresh groceries before heading home.

“We can process a lot more orders without increasing overhead when this [autonomous delivery] augments our manned delivery capability,” Gasanyan said.

Udelv Chief Executive Daniel Laury has told Trucks.com that the company’s all-electric autonomous vans can slash last-mile delivery costs by 50 percent when backup drivers are no longer required.

Gasanyan said he was so impressed with Udelv’s system that he’s trying to get Amazon, another client, interested in using the service for its Whole Foods grocery chain.

Other grocers see value. After meeting Laury at an industry event in Atlanta this year, Susan Binkowski concluded that her family owned grocery company could extend its reach via autonomous delivery.

A pair of Binkowski’s Oklahoma City-based companies, Esperanza Real Estate Investments and Buy For Less Co., have agreed to purchase 10 Udelv vehicles and to become the exclusive Udelv marketing agent for the entire state.

The first vehicle is to be delivered in the first quarter of 2019, with the rest to follow by year’s end.

“This is a technology we’d like to move here from Silicon Valley,” she told Trucks.com.

Binkowski’s companies own and operate 14 grocery stores serving a variety of neighborhoods. “But Oklahoma City is sprawling, and there are a lot of food deserts. You can’t always build 50,000-square-foot grocery stores where people need them, and people don’t always have cars” to get to the stores that do exist, she said.

Autonomous delivery vans “are a way we can serve underserved areas,” she said.

Progress in the autonomous vehicle arena, though, “rides on the advancing of the sensor technologies and other systems the vehicle needs for understanding its environment,” said Antti Lindstrom, an industry analyst with IHS Markit.

“As the costs go down and the quality of the systems goes up, I think we will start seeing more and more specialized, niche-oriented solutions” like Udelv, he said.

“The stage we’re at is telling businesses of the opportunities,” Lubarsky said. Until recently, that entailed making calls on potential customers. “Now they’re calling us,” he said.

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