TSLA Tesla Inc

By Kelsey Gee 

Replacing the milkman for good will require car manufacturers like Ford Motor Co. and Tesla Inc. to help build tiny self-driving delivery robots, said Dave Ferguson, co-founder and president of robotics company Nuro.

The autonomous vehicles that Nuro currently makes, which look like large coolers, aim to solve what many in the supply-chain and logistics industry refer to as the "last mile" problem, Mr. Ferguson said on Wednesday at The Wall Street Journal's Future of Everything Festival. Getting groceries, dry cleaning and other goods to the front steps of consumers' homes and apartments today typically requires an expensive fleet of couriers with companies like Amazon.com Inc. and United Parcel Service Inc.

Fast-food chains and grocery stores are partnering with vehicle makers and startups like Mountain View, Calif.-based Nuro to try to replace these mail and package carriers and to better compete with companies like Amazon, which offers free one-day shipping for its Prime members.

But replacing all of those delivery workers with autonomous machines, for now, is still more expensive than startups like Nuro can achieve on their own, without the help of larger car makers, said Mr. Ferguson.

"We have the humility to realize that building vehicles is incredibly hard," he said.

Offering grocery-delivery services to all Americans won't be sustainable unless companies like his can keep prices low for customers, he said, which will require an army of mass-produced machines. "If we're able to build this future, it's going to require a lot of vehicles."

He expects the machines to be fully-electric, rather than relying on fossil fuels, and said they would need to be less awkward and clumsy than many of the current prototypes being tested in cities like Scottsdale, Ariz. There, Nuro has partnered with America's biggest supermarket chain by sales and stores, Kroger Co., to offer shoppers grocery delivery with their machines for $5.95 per order, but the vehicles are still slow-moving and run at speeds that top out at 25 miles an hour.

"I think one of the complaints that's often leveled at self-driving vehicles is they drive like my grandparents," he said. "That's really annoying if you're inside the Uber driving around. It's great if you're the parents of kids running around the neighborhood."

Toyota Motor Corp. in 2018 unveiled a prototype podlike autonomous delivery vehicle and is working with Yum Brands Inc.'s Pizza Hut. Mercedes-Benz parent Daimler AG is also developing its own autonomous-delivery vehicles.

One thing Nuro and other robotics makers have going for them is the relative simplicity of designing a miniature-sized machine that doesn't need to carry any human beings, who tend to be more sensitive to bumpy road conditions and other safety issues than boxes of laundry detergent would be.

"We can drive along narrow roads with parked cars like in Manhattan," unlike bigger, and potentially more dangerous passenger vehicles making food-delivery runs today, said Mr. Ferguson. "That is an enormous advantage."

Write to Kelsey Gee at kelsey.gee@wsj.com

(END) Dow Jones Newswires

May 22, 2019 12:35 ET (16:35 GMT)

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