What is Autonomous Delivery and Why Now?

Imagine using self-flying air taxi services that cut your morning commute down to just minutes. What about a container ship or tankers sailing the seas without a captain at the helm? Or maybe a world where you could have a drone deliver pizzas to your front door.

These scenarios are already happening, and there is more to come.

IQT uses the term autonomous delivery to describe this market area, which includes the areas of technology that makes possible the large-scale transport of people and goods via autonomous vehicles. Autonomous delivery is a rapidly expanding area of research and commercialism, and companies in the business of moving people or things around on this planet are eagerly working to make this a reality.

Why Look at Autonomous Delivery Now

The convergence of technological breakthroughs and important social forces has accelerated autonomous delivery innovation. Over the next decade this innovation will reshape industries, economies, and society.

That makes now the time to look at, and invest in, the technologies that will enable these use cases. It's also the time to look at the regulatory actions that are critically important now to shape the outcome.

Technological breakthroughs needed include:

• Improvements in sensors and sensor fusion technology
• Advancements in artificial intelligence for perception, prediction, and planning.
• High-precision mapping

The social and market forces at play include:

• Public safety concerns
• Adoption of ride sharing
• Rapid urbanization
• Cost savings
• Desire for instant access

Autonomous delivery breaks down into three platforms: land, air, and sea.

Land

Developed nations around the world are experimenting with autonomous vehicles. By 2030, the autonomous driving system (including lidars, radars, cameras, computers, software and maps) market will reach $57 billion, and by 2040 the market value will reach $173 billion.

Driverless cars are a reality, and there is still much public concern about safety, despite statistics that show self-driving vehicles are relatively safe. A 2017 Pew Research Center survey found that 56% of U.S. adults did not want to ride in an autonomous vehicle, let alone own one.

That's why original equipment manufacturers (OEMs) are investing in and partnering with startups that have fleet management capabilities, realizing that autonomous shared services will happen before traditional vehicle ownership.

Air

Autonomous drone use is expanding in the delivery of goods, and Urban Air Mobility (UAM) is projected to become a major market.

Companies around the world are experimenting with drones for last-mile delivery services, based on receiving regulatory approvals. In the U.S., companies such as Google, Flirtey, and Matternet have tested drone deliveries in limited markets. In some countries, pilot programs for transporting people are rolling out as regulations are eased. Ehang in China and Volocopter in Germany already are ferrying people from place to place in Singapore, and Guangzhou, China.

We're also starting to see medicine delivery in African countries where communities are not accessible by road, and thus seeing the real-life saving potential of these technologies.

Sea

Safety improvements and cost efficiencies are largely driving autonomous delivery on water. The focus is on the most efficient operation of the vessel to save money on fuel, which also has a positive environmental impact.

Scandinavian countries, heavily involved in shipping, are leading the development of autonomous ships. The U.S., China, Japan, and South Korea also are investing heavily in the space. Major corporations are teaming up to build autonomous ships, while startups are building autonomous systems that can be installed on existing vessels.

Opportunities in Autonomous Delivery Technologies

All autonomous vehicles traditionally follow a "sense, plan, act" process, and they need to get better at perceiving the world around them. More accurate sensor and mapping data supported by external infrastructure will help them get there. Companies that can figure out the right recipe of sensors on the front and the neural network to process all that data will lead the market.

The enormous amount of training data needed to "teach" autonomous delivery systems is another growth opportunity. Simulated testing and data democratization will help build smarter systems quicker.

There is the problem of unpredictable scenarios, which can confuse even the best-trained AI software. Human safety drivers are required for most public pilots, but future vehicles will rely on remote operators as a safety measure.

The Regulation Challenge

Regulation is an important factor with autonomous delivery. Regulatory bodies strive to keep up with these technologies, but that's not that easy. For example, when the U.S. Federal Aviation Administration initially regulated airspace, there were no drones. Now they're in the position of creating waivers and examining what these types of vehicles mean for existing regulations. They're figuring out how to make sure citizens are safe when there are self-flying cars. Countries around the world face similar challenges.

Then there is the challenge of working with multiple regulatory bodies. In the United States, the federal government regulates safety standards for self-driving cars, but the states regulate vehicle operations. That creates an interesting dynamic where the safety mechanisms for these cars fall under federal domain, but the states determine how users operate those cars. Adding to that complexity is the patchwork of different rules and regulations from state to state. Until the Federal government sets laws that dictate what all the states will or will not do, we will see differences among the states in terms of what can or cannot be done for self-driving vehicles.

Global Picture of Autonomous Delivery

Despite regulatory challenges, the United States remains the global leader in autonomous delivery. China is narrowing the gap with extensive testing, strong state-level support, and an active venture capital community.

We're seeing pockets of innovation in Europe, Scandinavia, and Israel. And a handful of nations in Africa are beginning to explore the potential benefits of autonomous delivery technology.

Where investments are focused today depends on the platform. In the United States, a lot of the money is being invested in land uses, such as Google's Waymo project and the partnership between Cruise and GM.

In the air arena, there is much activity happening outside of the United States. We're starting to see a lot of Chinese and German investment dollars going into the airspace. Germany is providing regulatory support to enable companies to test early.

Globally many shipping companies are investing in sea platforms, especially companies in the Nordic region that have a lot of experience in shipping.

The Venture Community's Role

As those investing in these technologies, it's important to think about what the transition to this new reality will look like. Over the next ten years, we're going from a state where we don't use too many autonomous vehicles to a state where, hopefully, everything is autonomous. However, that is not going to be an A to B deployment. In reality, it's going to be A to Z.

In that interim between A to Z are collaborative markets where there's an opportunity to create niche businesses that ultimately are generating data that is useful for that future wide scale deployment.

Interested in hearing more? Check out our podcast on this topic!

We're eager to see how this domain develops and hope to craft the next post on autonomous delivery while enjoying pizzas during a ride in a self-driving vehicle.