What’s Next for Delivery Robots?
What’s Next for Delivery Robots?
New mobility VC firm, congestion pricing stalls, curbside charging sprouts in NYC
We’re at an interesting moment for the robotic delivery industry, which has spent the past few years perfecting the art of bringing you a sandwich in the cutest sidewalk-crawlin’ vehicle possible. With capital markets decidedly less frothy than they were a year ago, we’re seeing cash hungry startups — such as those that need to build out fleets of autonomous or remotely-piloted vehicles — struggle.
In a way, we’re in a similar moment to where the micromobiliy industry found itself about three years ago: after the initial land grab, the market rationalized, since there wasn’t necessarily a compelling reason for dozens of different operators to try their hand at the same business model, each with only slightly different color stickers slapped on the same Ninebot scooter…
As the micromobility market grew up, cities also matured in their thinking about how to regulate the industry. Instead of letting countless operators duke it out, cities started to turn to franchise models, where only one or two operators would serve a given municipality. This was a win-win, as it fed into a light network effect that’s good for the industry: more riders for a given brand means the brand can deploy more vehicles, meaning it’s more convenient for riders, meaning they’ll ride more, etc…
That in turn meant that as the micromobility industry consolidated, there was value in scooping up a competitor because of the the cities it operated in - it allowed the acquiring company to grow its turf in a more sustainable, defensible manor.
That’s where the analogy to delivery bots starts to fall apart. Since the bots are much more location specific, and aren’t just immediately open to anyone who sees one and can download an app, there isn’t quite as much value to achieving ever higher unit density in a given market. And given the nascent nature of the market, few of the operators have high-value, long-term, exclusive contracts with huge grocery, restaurant, or retail chains (in time, that will change, and that will make some acquisition targets more juicy.)
With those facts on the ground, that’s why we’re seeing certain delivery robotics companies falter in the face of tougher fundraising conditions, as Tortoise’s Co-Founder Dmitry Shevelenko recently shared with me. Others, like Serve, are turning to crowdfunding to raise cash (see my discussion with CCO Aduke Thelwell for more thoughts on that.) Others are using asset-backed financing to keep the lights on.
It’s not all doom and gloom though. I found this conversation with Coco’s Co-Founder Zach Rash particularly illuminating, as he shared why he believes the company can make money now, detailed the company’s founding story out of a UCLA lab, and offered insights into the regulatory environment. Other startups might heed the lessons he shared from Coco’s struggles in certain Texas markets; I’ve long said that delivery bots won’t work in environments that are too sprawling (good luck crossing a 10 lane stroad) nor overly dense (too many feet to avoid tripping on.) Today, companies are working to find out exactly where the outer bounds of that sweet spot lie: where exactly delivery robots can thrive. Zach shared a whole lot more thoughts in our interview over at OttOmate; normally it’s paywalled but here’s the full article for you curb-aficionados.
Avid readers may have pieced together that I’m working my way across the entire delivery robotics landscape; recent chats with Cartken and The Urban Robotics Foundation were also quite telling. We’ve also got some great conversations coming up with leaders from Kiwibot, Starship, and more - be sure to subscribe to OttOmate to get them directly in your inbox.
Last Call for Consulting & Advisory Projects!
Those of you that know me as more than just your humble newsletter over-sharer know that every year, post-Curbivore conference, I work on a few interesting mobility and delivery projects. Having scaled carsharing from zero to nationwide, launched a D2C ebike brand, worked with OEMs, and advised companies of all sizes - I’m open to compelling marketing, strategy, and growth projects of all shapes and sizes. If you’re working on something interesting this summer - let’s chat! (Whoops, last week I had some issues with my email - now corrected!)
HOT INDUSTRY NEWS & GOSSIP
Curbside charging hassle? Fuhgeddaboudit! Friend of the curb itselectric has partnered up with Hyundai Cradle and NYCEDC to bring curbside charging to the Big Apple. Expect to see the first deployments across two campus-like environments — The Brooklyn Army Terminal and Steiner Studios — as the orgs learn from the initial pilot.
Rideshare shakeup… Uber-owned Careem is spinning out its super app business into a separate entity, netting $400 million in the process. Uber will continue to own the core ridesharing business (dominant in MENA and South Asia,) while handing off the rest of the firm to Emirates Telecommunications and others.
How much *don’t* Americans walk? Anyone that reads this missive already knows Americans aren’t particularly keen on walking, for a mix of infrastructural and cultural reasons. Now new data highlights just how sedentary your fellow Americans are.
Going nowhere fast: Congestion pricing could bring enormous benefits to NYC (or anywhere, for that matter.) It would raise new funds to improve public transit, it would cut down on pollution, and it would even shorten drive times for folks who still chose to use a car. So of course Transportation Secretary Buttigieg recently shared that there’s still no timeline for approving the project. (Long time curb-heads may recall that about 15 years ago the situation was reversed: the Feds approved of congestion pricing but NY state government scuttled the program. The hundreds of millions programmed for the project instead went to expanded bus service and congestion pricing for freeways in LA, and bus lanes in Chicago.)
Meet the new money: In today’s wobbly markets, you’ve got to applaud anyone that’s raised a few venture fund, especially one focused on sustainable cities and transportation. Streetlife Ventures has a particularly impressive founding team: Laura Fox (former GM of Citi Bike) and Sonam Velani (Goldman Sachs.)
Which way to San Jose? Northern California’s largest city may have helped create many technical marvels, but that enamoration with technology seems to sometimes get in the way of good transportation. Case in point: a new plan to serve the city’s airport rejects tried and true methods and instead hopes to rely on a “robocar network.” Hope you don’t mind waiting a while…
Shared progress: Over at Fast Company, David Zipper argues that American bikeshare systems have been hamstrung by the fact that almost all of them make do without public subsidies, unlike basically every other form of transport in this country. If we want the systems to thrive (or avoid closure, as is happening in Minneapolis) - it’s time the government ponies up. I would argue that this applies to shared scooters as well, as we’ve seen that space struggle lately as well. (But do note, privately-owned scooters seem to be thriving, as evinced by Unagi’s fresh fundraising round.)
A few more links: A very bad use of curb space. Go behind the scenes in Taco Bell’s Innovation Kitchen. McKinsey shares secrets to successful online grocery businesses. MaaS Conference returns to SF. Rivians ruled ineligible for $7,500 rebates. New #CitiesFirst podcast on decarbonizing transport. Somerville releases bike plan. Trucking in a “freight recession.” Drone delivery takes off. We’ll see about that… Didi claims it’ll launch 24/7 robotaxis across China by 2025. Looks like California’s housing issues might not be about zoning. New evidence links cutting bus service with rising poverty - duh!
Until next week!
- Jonah Bliss & The Curbivore Crew