Coco, the Santa Monica-based delivery robot company, announced a partnership with Uber Eats in August.
The company declined to describe terms of the deal, including how Uber and Coco will split the revenue or if delivery costs will be lower for the end user.
Coco was founded in 2020 by two UCLA students. The company has raised $63 million to date, according to Pitchbook.
“I think a lot of companies in this space have been obsessed with the R&D and engineering and (artificial intelligence) research without really thinking about what it actually means for a local restaurant,” Coco Chief Executive Zach Rash said. “There’s a lot that goes into this product and service that has nothing to do with AI.”
Indeed, managing a fleet of company-owned robots provides a different logistical challenge than employing drivers who pay for their own car and gas. Robots need to be able to work with restaurants that do hundreds of deliveries a day, keep food appropriately hot or cold on the journey and be intuitive for restaurant owners to use. They need to handle traffic stops or changes to the delivery route. Sometimes, those robots run into issues when tree roots have broken through a concrete sidewalk, or when a hand-off is in a complicated area.
But Coco plans on creating more form factors better suited for slick roads, rocky pavement and other issues, which, Rash said, will drive down the cost of last-mile delivery and expand its use cases.
The problem with last-mile
The partnership is another notch in the belt for Uber, as it continues its foray into automated food delivery. The company partnered with Serve Robotics, an automated delivery robot service, in May.
Uber Eats, the small-goods delivery arm of Uber, sits at the most cost-prohibitive, cumbersome and environmentally unfriendly part of the supply chain: last-mile delivery. Last-mile delivery is difficult to scale – unlike a freight truck that takes multiple packages to one location, last-mile delivery delivers specific goods straight to the door of individual residences. As a result, it’s also expensive – a Capgemini report found that last-mile delivery accounts for 41% of total supply chain cost and 53% of shipping costs.
For Uber Eats, last-mile delivery means driving a car from the restaurant through congested streets to deliver food – everything from a family feast to a single burrito – every day. One courier told Modern Retail picking up orders for Uber Eats was only worthwhile if they were large orders, given the cost of gas, vehicle maintenance and Uber’s cut.
Coco’s 1,000 delivery robots – essentially little tubs on wheels – are rolling around the well-paved enclaves of Los Angeles (and carefully avoiding the not-so-well paved parts), delivering insulated goods to customers in Santa Monica, Koreatown and downtown. Because they’re automated and have a small footprint, they’re more cost-effective and environmentally viable than couriers.
“A lot of the things that are online actually exist pretty close to them, but getting it delivered by a person in a car just doesn’t always make sense if it’s an expensive order. So they might order it on Walmart or Amazon or some other e-commerce website,” Rash said. “There’s no reason that a robot can’t shuttle that order to you. But that’s the kind of trip that doesn’t make sense for a person in a car to do, because they just can’t earn enough money to make it worth their time.”
