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Amazon looks to self-driving future by acquiring Zoox

by Ace Damon
Amazon looks to self-driving future by acquiring Zoox

NEW YORK-
Amazon said Friday which is buying autonomous driving technology company Zoox, which is developing an autonomous vehicle for a ride-hailing service that people would request on their phones.

Seattle-based Amazon has not disclosed how much it is paying for Zoox, which was founded six years ago in Foster City, California. Analysts estimated the purchase price at more than $1 billion.

The online retail giant said Zoox will continue to function as a separate business and will continue to develop its own autonomous vehicle.

“We’re excited to help zoox’s talented team bring their vision to reality in the coming years,” said Jeff Wilke of Amazon, who runs the company’s retail business.

The deal could lead Amazon to a whole new business: transporting people from one place to another. But some analysts think Amazon’s ultimate goal is to reuse the Zoox vehicle for its core business, delivering packages to buyers.

“My guess would be in the short term that Amazon is probably more interested in taking this platform and adapting it as an alternative or complementary to its existing fleet of delivery vans,” said Sam Abuelsamid, principal analyst at Guidehouse Insights, which tracks autonomous vehicle developments.

Abuelsamid says Zoox has a good autonomous system and planned to deploy a ride-hailing service next year. It is also building its own vehicle that can travel in two directions, making it ideal for urban deliveries. He sees Amazon converting small vehicles into mobile lockers that would stop at delivery locations for people to pick up packages.

Amazon did not directly answer a question about whether autonomous package delivery was its goal, but said Zoox would “continue to work toward its mission to transform mobility as a service by developing a fully autonomous, purpose-built vehicle.”

The company warned that widespread use of autonomous vehicles is still years away and will require substantial capital investment in a crowded field. The deal puts Amazon, which has grown rapidly since its inception as an online bookseller 25 years ago, in competition with Google’s autonomous driving technology spinoff called Waymo, and General Motors’ Cruise autonomous vehicle unit.

Autonomous delivery would fit Amazon’s plans to deliver more of its packages on its own and rely less on UPS and the U.S. Postal Service. In recent years, it has expanded its fleet of planes, built package classification hubs at airports, and launched a program that allows people to start businesses that deliver packages in vans stamped with the Amazon logo.

The investment could complement the $700 million Amazon put into electric vehicle startup Rivian in 2019. Rivian, with operations in suburban Detroit and California, has a contract to make 100,000 electric delivery vans for Amazon. The company also has a factory in Normal, III, with extra capacity that could be used to build zoox vehicles for Amazon, Abuelsamid said.

Amazon’s acquisition changes the landscape in the autonomous vehicle business by bringing in a deep-pocketed competitor, Abuelsamid said. This increases pressure on smaller companies that are building delivery vehicles, he said.

The Zoox acquisition is not Amazon’s first foray into autonomous vehicles. In early 2019, he joined other investors in a $530 million stake in Aurora Innovation. Aurora has recently focused on an autonomous driving system for heavy trucks.

Amazon has used standalone technology to receive orders from buyers: autonomous robots shuffle products around its warehouses, and a colder-sized six-wheeled robot delivered orders in a Seattle suburb. It is also working on self-piloted drones that fly small products to customers’ homes.

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Krisher reported from Detroit

We are pleased to announce that Zoox is joining the @amazon. We’ve made great strides in creating autonomous mobility from scratch, and we’re excited to continue working with our exceptionally talented team to realize that vision. https://t.co/TdQKaebKW7

— Zoox (@zoox) June 26, 2020

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