How Amazon's Bet on Autonomous Vehicles Can Help Protect Us from Viruses

With the world on pause due to the coronavirus and home delivery increasingly important, including for those who never relied on it before, Amazon.com's ability to deliver essentials to our doorsteps has never been more important. Before the pandemic, Amazon.com had already saturated the American ethos, consuming 2 percent of U.S. household income; even more American households are Prime members (57 percent) than attend church (51 percent). Yet, Amazon founder Jeff Bezos—the world's richest man in 2019—has never been content to rest on his laurels. In his new book, Bezonomics, award-winning Fortune magazine reporter Brian Dumaine examines how Bezos used technology to disrupt business models and consumer behavior. In this excerpt, Dumaine discusses the future of the last-mile of deliveries and its implications for helping contain costs, delivery time—and even viruses by reducing the need for humans to get the job done.

With the COVID-19 lockdown still in force in most parts of the country, Americans remain shut up in their homes, Zooming their work or school and waiting for signs of relief. Quarantining doesn't make much sense, however, if they still run out to the market to buy food and supplies. That's why many consumers have turned to online stores that can deliver right to their door. Families stock up on food and household staples, including toilet paper and hand sanitizer when they can find those precious commodities.

As a result, Amazon, Walmart, Instacart and Fresh Direct have seen online orders soar and are scrambling to make deliveries to coronavirus shut-ins. The demand is so overwhelming that Amazon can no longer offer one- or two-day deliveries for its Prime customers and has had to prioritize groceries, household goods, medicines and other essential items. At the same time, the e-commerce giant suffered outbreaks of the virus at some of its warehouses and was hit by a handful of strikes by employees who believed that the company wasn't doing enough to protect them. In response, Amazon in late April said it would spend $4 billion—more than its projected second-quarter profit—to buy 100 million masks, 31,000 thermometers and to institute employee testing, among other safety measures. The hope is that enough warehouse and delivery workers will remain healthy enough to keep delivering food, medicine and other crucial goods.

While it's too late for this round of the virus, Amazon and others have been working on a technology that could help contain future epidemics. Amazon's founder and CEO Jeff Bezos has jumped headlong into the autonomous vehicle race. Bezos sees a future where packages will be delivered by self-driving vans, small bots rolling through neighborhoods and drones buzzing to their destinations. And they will be unstoppable because robots don't catch the flu. When that day comes—and Bezos is betting billions that it will—one could imagine our robotic brethren bringing everything from Beyond Meat to oat milk to millions of quarantined souls.

While helping the afflicted is a noble cause, that's not why Bezos is embracing this technology. The challenge for Amazon and all other grocers is that delivering food and other goods is costing the company a fortune. In 2018, Amazon spent $27 billion on shipping—a 23 percent increase from the previous year. The cost of a single delivery can range on the high end from $7 to $10. The last mile is where the costs pile up. It can account for more than half of the total cost of shipping a package. McKinsey & Company predicts that autonomous deliveries to a customer's door will allow retailers to slash shipping costs by more than 40 percent, saving Amazon more than $10 billion a year, and giving it yet another edge over its competitors.

So the race is on to create reliable and affordable autonomous delivery vehicles. Amazon's vast computing power and machine-learning expertise make it a potentially formidable player in the field. In 2016, the company earned a patent for a system that helps autonomous cars figure out which direction traffic is traveling to help a vehicle safely enter the proper lane. In its partnership with Toyota, Amazon is developing a self-driving concept vehicle called the e-Palette, a minivan that can move people or packages. It had been planned to be unveiled at the 2020 summer Olympic games in Tokyo, which have since been postponed due to the pandemic.

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Toyota’s e-Palette concept vehicle was displayed at the Consumer Electronics Show in 2018. David Paul Morris/Bloomberg/Getty

In early 2019, Amazon led a $700 million investment round in Rivian, a Michigan company that is developing a battery-powered pickup truck and a sport utility vehicle. Ford later that year invested another $500 million in the company. Around the same time, Amazon led a $530 million investment round for Aurora, a Silicon Valley self-driving vehicle start-up that is developing the AI brains behind autonomous vehicles and plans to partner with retailers like Amazon and major automakers to create state-of-the-art autonomous vehicles.

One thing that's almost certain is that when autonomous vehicles do first appear in significant numbers, they'll be delivery vans. That's because carrying packages rather than humans greatly reduces the risk posed by self-driving vehicles. If an order of Dr. Bronner's castile soap gets crushed in a fender bender, that's unfortunate, but not a tragedy. In an accident, the vans will be programmed to sacrifice themselves to avoid harm to pedestrians, bicyclists or drivers of other vehicles. In other words, they'll crash into a tree rather than collide with a pedestrian or other car.

Also favoring delivery vans in this first-mover role is that, for the most part, they have predictable routes and therefore can more easily learn the ins and outs of complex cityscapes—reducing the chance of navigation errors and accidents. A number of innovative companies, working with big retailers, are already running pilot programs with autonomous delivery vans. On January 30, 2018, the Silicon Valley start-up Udelv made what it claims to have been the first self-driving delivery for Draeger's Market in San Mateo, California.

The basic concept is that a customer uses a smart app to request a delivery for a certain window of time. Much as Uber does, the app can track the location of the vehicle as it makes its way toward its destination. When the van rolls up to the home, it texts the customer a code and a notice that the package—whether it is groceries, dry cleaning or prescription drugs—has arrived. The person walks up to the van and punches the code into a screen on the side of the vehicle that pops open a door to a storage compartment. Once the package has been retrieved, the door closes and the van drives to the next destination.

Self-driving delivery vehicles come in all shapes and sizes. In early 2019, Amazon let loose six Scout delivery vehicles on the sidewalks of Snohomish County, Washington. The two-toned, baby-blue-and-black, battery-powered devices look like small coolers on wheels. They can travel the sidewalks at a walking pace and avoid pedestrians and pets. The Scouts use an array of sensors to navigate their way across streets and around obstacles. The self-driving delivery bot stops when it recognizes its destination, alerts the shopper by text and pops open its top. When the person picks up the package, Scout closes its lid and heads back for its next job. So far, Amazon likes how Scout rolls, and in the summer of 2019, the company decided to expand the program into Southern California.

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Amazon’s perky Scout navigates by way of sensors. Amazon

While the Scout seems to make sense for simple deliveries, it's not yet a good substitute for humans. A robot—at least not yet—can't open gates, climb stairs, ring doorbells or slide a small package safely between a storm door and front door to keep it dry on a rainy day. These vehicles only work when the customer is at home, which limits their usefulness. What if the customer is a no-show? How long does the car wait? Amazon and others believe part of the solution will be to build personal lockboxes where robots can drop packages, but rolling out such an infrastructure will take years if not decades. And what happens when some mischievous kid tips a Scout over? Or when armies of Scouts jam up city sidewalks? These vehicles might solve the last-mile problem, but they will create a last-50-feet problem.

Not all autonomous delivery vehicles roll along the ground. In 2013, Bezos appeared on CBS' 60 Minutes and explained to correspondent Charlie Rose how Amazon's drones could deliver a 5-pound package to customers within a half hour. The significance is that, according to Bezos, some 86 percent of all packages that Amazon delivers weigh 5 pounds or less.

Drones have many positive attributes. Theoretically, they emit less greenhouse gas than gasoline-powered delivery trucks, and they can reach remote areas to deliver crucial medicines. They can help monitor utility lines and bring crucial supplies to disaster areas. They can also be used to bring consumers in rural areas more choice at better prices. In China, online retailer JD.com has used a drone to cut the delivery time to a remote mountain village from days to minutes, while slicing the cost dramatically.

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An employee prepares a JD.com drone during a package delivery demonstration in China.

In April 2019, the FAA, which regulates U.S. airspace, let Alphabet, the parent company of Google, start a test drone delivery service in Virginia, the first of its kind in the U.S. Amazon soon followed. If drones start frequenting the skies, Amazon can expect serious blowback from local communities. Some worry about privacy—are the cameras on the drones being used to spy on people? Drone makers say the cameras are low resolution and only meant to aid in navigation and to improve the drone's performance. That might be the case now, but there's no guarantee that the cameras won't get better and nosier.

The bigger worry is noise. A 2017 NASA study found that heavy road traffic in residential areas is much less annoying than the back-and-forth high-pitched buzz of drones. When Alphabet's Wing division started using drones to deliver hot coffee and food in three minutes or less to customers in the Australian suburb of Bonython, Canberra, the buzzing didn't go over well. Jane Gillespie, a local resident and a member of Bonython Against Drones (BAD), says the drone's loud, high-pitched whirrs sound like a "Formula One racing car."

Whether it's a drone, a Scout delivery bot or a full-sized autonomous delivery van, autonomous delivery conveyances make more economic sense than human drivers. That means the future lies in self-driving delivery vehicles, and people will need to get used to them plying the streets. At first, these machines will make for some bizarre encounters. In a pilot program in Ann Arbor, Michigan, an autonomous Ford Fusion hybrid was used to deliver Domino's pizza to the front doors of suburban homes. After getting their pizza, some customers, caught on videotape, would say "Thank you" to the car.

It's hard to understand why anyone would do this. Perhaps they were afraid that when our robot overlords take over, the first thing they'll do is check the old log files to see who was nice to the robots and who wasn't.

→ Adapted from Bezonomics by Brian Dumaine, published by Scribner.