Congratulations to the entire Zoox team — I’m very, very happy for you!
So why did Amazon buy Zoox? Amazon gave this rationale: “We’re acquiring Zoox to help bring their vision of ride-hailing to reality.” And further down in the press release: “Zoox is pioneering the future of ride-hailing by designing autonomous technology from the ground up with passengers front-of-mind.”
I don’t buy that Amazon would “help” to pioneer the future of ride-hailing by passengers.
Amazon simply doesn’t strike me as a company that altruistically helps others achieve their visions. Furthermore, Amazon isn’t in the people-moving business, a space with already fierce competition, and lots of controversies. I don’t think they’d touch that business with a 10-foot pole.
However, Amazon’s own business is plagued by problems that could be solved by self-driving cars:
- Cost of last-mile deliveries: Amazon has traditionally used the U.S. Postal Service for many of their shipments. And President Trump has regularly attacked Amazon for paying what he perceives as too little for this service. Amazon could stop using the postal services altogether by creating its own fleet of autonomous, last-mile delivery vehicles.
- Labor disputes: Are Amazon drivers self-employed entrepreneurs or employees disguised as gig workers? Self-driving delivery vehicles need fewer drivers and don’t incur social costs and are never employees. Amazon could save money and avoid an Uber-like labor dispute.
- Round-the-clock deliveries: Self-driving vehicles never tire and happily work 24 hours. Amazon could deploy the technology in trucks for the long-distance shuttles between logistics centers, plus small and low-speed vehicles for door-to-door deliveries in neighborhoods, and more.
With self-driving delivery vehicles, Amazon could increase their service level while saving money on employee-related costs. Both benefits are very near and dear to the Amazon DNA.
But creating a robot taxi fleet that ferries people around? Nah, I don’t think so.
If Amazon didn’t buy Zoox to create taxis, why then?
My prediction is that Amazon will create autonomous, round-the-clock deliveries; initially, only for Amazon customers, then, for other delivery businesses, too. Amazon will apply the same playbook that has worked so well for them in the past:
- First, employ new technology for your own business to increase service levels and lower cost
- Next, use the Amazon volumes to perfect the technology
- Create an unfair advantage in the process
- Finally, productize it and offer it to everybody else
So watch out logistics businesses:
And self-driving car makers:
And taxi and delivery companies:
Amazon is coming for all of you, and they have lots of time. And lots of money. Watch out!