Amazon pays $1.2 billion for self-driving startup Zoox
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I saw this in my news feed last night. I'm still not sure where the value-add is for Amazon unless they use the self-driving software for their drone deliveries or in-warehouse automation. Even if Amazon develops self-driving delivery vehicles, they'll still likely need humans for final delivery/opening doors. Does Amazon really want to get into the ride-hailing business alongside Lyft and Uber?
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I'll look forward to Prime Driving being added to my subscription as a combination package-delivery and transport service.
As a passenger, you'll be able to be picked up at you location and be driven to the nearest location to your destination with a package to be delivered. You'll then be responsible for completing and verifying that delivery with the Prime app on your phone before completing your journey. Amazon wins by reducing their logistics costs and you get unlimited use of the robo-taxi fleet for 'free'.
OK, tongue way in cheek, but at least it's a business model, which is more than most self-driving companies have to offer.
As a passenger, you'll be able to be picked up at you location and be driven to the nearest location to your destination with a package to be delivered. You'll then be responsible for completing and verifying that delivery with the Prime app on your phone before completing your journey. Amazon wins by reducing their logistics costs and you get unlimited use of the robo-taxi fleet for 'free'.
OK, tongue way in cheek, but at least it's a business model, which is more than most self-driving companies have to offer.
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It's hard to shake the feeling that this is another example of a company positively bursting at the seams with gargantuan coffers of cash it doesn't know what else to do with.
(I can think of a solution to that problem. It's not Amazon's fault for making money. That's what it's designed to do. It's ultimately our fault.)
(I can think of a solution to that problem. It's not Amazon's fault for making money. That's what it's designed to do. It's ultimately our fault.)
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For all those big rigs that move goods from ports/airports to warehouses.
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killswitch1984
Wise, Aged Ars Veteran
Elon called Jeff a copycat in response. It will be interesting to see if Amazon uses this to pivot into the trucking industry in time to compete with the forthcoming Tesla semi.
Edit: I suck at HTML.
Edit: I suck at HTML.
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Does Amazon really have a lot of cash? They lost money every year until somewhat recently I think.
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I'm always curious what happens when a company like Amazon acquires some other company, do employees' salaries get upgraded to the crazy high salaries that FAANG companies pay?
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AWS generates a ton of positive cash flow, which Amazon uses to fund a lot of their other ventures.
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Zoox is already in the Bay Area, so all their employees are making FAANG-level salaries. You can't attract talent in Silicon Valley if you don't pay competitive wages.
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This is what happens when you intentionally burn money to grow rapidly and corner a market, and are successful. Long periods of loss and then massive profit. They make something like $4B in profit every quarter, though I think Q1 was down to $2.5B on coronavirus complications.
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I think you're looking at things too statically. The standard now is that a human being drops a package on your doorstep because that works well for human delivery people. But there are lots of other models.
For example, instead of one- or two-day delivery, make it one-hour delivery but with the caveat that you're expected to be home (or at work or whatever) when the package arrives. That's expensive to do with human labor, but wouldn't be particularly expensive if a robot is making the delivery. This is basically the model that most delivery robot startups are pursuing.
Or maybe a big robot carries around a fleet of tiny sidewalk robots that just drive up your driveway and wait until you get home from work. If they're cheap enough this could be viable.
And of course there are many applications that consumers won't see directly—like long-distance trucking or moving goods between warehouses within a metro area. Maybe robots bring packages to a neighborhood and a guy there walks around dropping them off on peoples' doorsteps.
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Isn't a large chunk of their profits due to AWS? Around ~80%, IIRC. Did AWS ever have long periods of losses?
Edit: Looks like for this past quarter, AWS accounted for 77% of their overall operating income.
https://www.cnbc.com/2020/04/30/aws-ear ... -2020.html
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I can imagine a few ways to take the driver out of it. Could drive to a house and have a drone fly it. To the door and drop. Could schedule deliveries, have a door open up and have the customer grab the package. More imaginative people than me are on it I assume.
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Why not have the customer come and retrieve it from the vehicle? You could turn a van into what amounts to a rolling Amazon locker.
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In suburbia, a van that goes to your zone (5/10 mins from your house) that is going to be there the a full day for you to pick your stuff. If there are several buyers from the same zone, it could work, like Amazon lockers, but for suburbia.
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Have Boston Robotic's Spot be a passenger on each car, where Spot will carry the package for drop off at the door?
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How much can a small drone lift? and what is the average weight of a package in the US?
Self driving truck drives up to your home then a drone flies the smaller package and lands it in your backyard. Sure it's not for apartments or large deliveries but is smaller deliveries to homes with backyards say 20% of US deliveries? because that would work.
Self driving truck drives up to your home then a drone flies the smaller package and lands it in your backyard. Sure it's not for apartments or large deliveries but is smaller deliveries to homes with backyards say 20% of US deliveries? because that would work.
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Alexa, take Kenny and I to the little league game then drop Susan off at swim lessons, Nikki at karate, and little Joe to violin.
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The proliferation of large companies buying "start-up" companies has made me wonder how many of these start-up companies are started up with the deliberate intent to be sold to a large company.
Nothing Zoox ever did had a business plan other than "let's throw an AV against the wall and see if anyone sticks to it." They created add-on parts and planned to have a commercial option available this year, but now that's going to Amazon.
Their focus was the robo-taxi market, but again, they had no product for sale after six years of development.
To me, they sound like low-hanging fruit that would have rotted on the vine if they DIDN'T get bought out by a large company. Given the difference between valuation and selling price, especially in light of the fact they began with $800 million in VC funding screams to me that they just wanted to take the money and run. A viable product was probably not in the offering.
Now Amazon has to decide what, if anything, they're going to do with it. They bought it on the cheap. Maybe they needed a tax write-off.
Given how few of these things pan out (the drone deliveries especially, and, assuming some taxi service, I don't see that being at all popular due to the general distrust of the safety and reliability of EV's, whether earned or not), I expect a tax write-off is going to be in its future, whether intentional or not.
Nothing Zoox ever did had a business plan other than "let's throw an AV against the wall and see if anyone sticks to it." They created add-on parts and planned to have a commercial option available this year, but now that's going to Amazon.
Their focus was the robo-taxi market, but again, they had no product for sale after six years of development.
To me, they sound like low-hanging fruit that would have rotted on the vine if they DIDN'T get bought out by a large company. Given the difference between valuation and selling price, especially in light of the fact they began with $800 million in VC funding screams to me that they just wanted to take the money and run. A viable product was probably not in the offering.
Now Amazon has to decide what, if anything, they're going to do with it. They bought it on the cheap. Maybe they needed a tax write-off.
Given how few of these things pan out (the drone deliveries especially, and, assuming some taxi service, I don't see that being at all popular due to the general distrust of the safety and reliability of EV's, whether earned or not), I expect a tax write-off is going to be in its future, whether intentional or not.
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And you just described the beginning of the end time!
It's all fun and games until they either try and unionize or learn how to use weapons.
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And you just described the beginning of the end time!
Or they call the scary wiggly worms from the wormhole.
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According to this they do: https://www.cnbc.com/2019/11/07/microso ... -cash.html
And keep in mind that cash flow and profitability are 2 different things: https://www.extension.iastate.edu/agdm/ ... it%20(loss).
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If I have to put pants on and leave the house, you’ve defeated the purpose of my having it delivered.
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About $50B I think. They're certainly not sitting on cash like Apple, and I doubt they're just buying stuff because they don't know what to do with it. But they can buy even a big company for all cash if they wanted to. Also, Amazon doesn't really lose money. They invest a lot into their growth so their financials showed no profit until recently.
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Why let all these incipient technologies compete against each other in the wild, when we can just buy them up sight unseen and hold onto the patents?
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For AWS specifically, it's hard to be certain. While it launched in 2006, they didn't break out AWS separately until 2014. Some analysts in the few years prior to that stated they expected it was operating at a loss by parsing their "Other" category, and trendlines from what data is available starting in 2014 point to that likely being true. The 2014 data was retroactively released in 2015 when Amazon announced AWS was profitable and would be included as a separate line item on their books going forward.
So all public indications are it became profitable in the early-to-mid 2010s after operating at a loss since launch in 2006, but there's no way to be sure.
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Taking up your imagination challenge. Bricks are cheaper than drones, and have no difficulty delivering into the house, even if nobody is home.
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Pants can be optional; some of us cannot live within 1000 ft of a school anyway.
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I am guessing in 2022 Amazon writes off this acquisition; I have never understood these orthogonal acquisitions. In theory it’s about delivery vehicles but couldn’t they have achieved it by licensing software from entities much farther in the game? I doubt Zoox is sitting on patents when other players are clear leaders in this space.
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Assumption is current robotic stack would work in dense population urban area without constant human monitoring. I am not quite sure about this.
May be teleoperation?
May be teleoperation?
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While watching a Bloomberg Quick Take on Youtube on Zoox, I wondered what is their angle on automated driving?
Tesla is more incremental and riskier, Waymo is a very controlled approach to automation. In the end both work with existing cars. Here Zoox come in: They think that automated driving is not only a question of data and algorithm. It works better when the car is especially design for that task.
And in Amazon warehouses a specially designed vehicle works better than an existing car. So, Amazons probably prefer an automated driving start-up that offers that flexibility on the vehicle side. And on a corporate real estate, road codes matter less. So, one of the weaknesses of Zoox approach on public roads, getting an regulatory approval for a fundamentally new designed car, is non-existent for Amazon. At the end Zoox approach fits better into their physical constraints.
The Bloomberg Quick Take had a different conclusion: Zoox algorithm was unparalleled in navigating between low, mid and high-density traffic situation in an instant. So maybe they are just superior. But than again, why is the buying price a third of their funding worth?
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