All to often, we are faced with a technology we feel is innovative and will break down an entire economy. That seems nearly certain with delivery, right? Wrong. If anything, the next 20 years will see a critical failure in an industry better suited to long haul trucking, train driving, and other even more mundane or menial tasks.
So many decent initiatives in technology fail because they do not consider the most important end games, people, security, and cost. In self-driving delivery game, that comes in the base pay vs. maintenance and LIDAR debate, security, and the customer services side.
There is an important reason to consider delivery as the improper industry for self driving cars, customer service.
No matter how many times a person is called, how hard, the door is knocked, or how friendly the front desk is. 25% or more of deliveries require problem solving well beyond route finding to provide both quality customer service or just complete a sale. This is well beyond the basic people enjoy interactions with others more than vehicles, another crucially important element.
Even a UPS driver will find that person just too completely unaware of their surroundings or un-trusting of their phone to respond to the door.
There are also the slew of factors not capable of being solved by a car that cannot fit through the front entrance, the factors that can drive the average tip over $5.
- some high end establishments require talking to the front desk and arranging pickup due to ‘security’ reasons
- some people require two or three approaches to reach
- there are an increasing number of gated neighborhoods hiding miles of housing
- People need an outlet to complain and the busy storefront will just hang up on them. They accomplish satisfaction by lodging a complaint with your driver.
- stores tend to shift blame for failed quality control to drivers as near independent contractors to avoid the blame being placed on the store
- many people, whether they consciously realize it or not, actually order delivery because someone comes to their door with good etiquette, a smile, and an assurance that their order is 100% correct
- people tend to feel more secure when a trusted agent is in control of their goods and makes this fact known.
- wrong orders made by everyone and everything are caught with good quality control and pizza chains follow CASQ better than most IT companies to achieve near 95% success
Imagine if every store lost even 15% of their business. Chains and restaurants paying drivers are already stretched to their capacity in a delivery radius that cannot be changed. That 15% will hurt and possibly close a store.
Consider, next, the lesser factor, maintenance and vehicle costs.
The cost of maintaining an electric car is, in fact more expensive than the cost of maintaining a fleet of drivers. If the average drive is paid $9.50 on average ($7.25 if tips are not equal to this price or you work for a better store attracting better quality employees + $10.25 per hour in store + $1 per mile), and the cost of LIDAR maintenance is roughly equal in addition to the cost of additional IT support staff and technicians, the store loses money.
That is not to mention the expenditure per car. The base delivery vehicle in the tech company’s target industry is $0, the driver provides the vehicle. The cost per vehicle for a fleet of 13 cars running constantly is much higher even if by the time of writing this that cost goes down significantly. There is the $17000 base per vehicle, the breakdown of even electric vehicles and their maintenance at $120 per month, any electricity at $30 per vehicle per month, the cost of wifi at $100 per month per vehicle, $500 for an entire phone line setup for your fleet per month, and the cost of wear and tear at $.50 per mile due to the technical nature of the vehicle. Gasoline costs will range between $20 and $40 per night if the vehicle is fueled by gasoline. A new car will be required every 4 years. Repairs can add thousands of dollars per year not considering LIDAR as the vehicle ages.
Finally, let’s consider security. In the past few years, the military lost at least 2 drones to Iran who simply launched a DDOS attack on them. How hard is it to lob requests at a cars network? Not difficult. Ask Charlie Miller.
If every drone carried $1000 in cash on a good day and there were dozens of drones to hack, that is more money than even a help desk employee makes in an entire year. Most attacks can be bought from the dark web. There isn’t as much skill involved in hacking as there used to be.
In sum total, delivery is the wrong industry to target self-driving vehicles towards.
There is a reason delivery drivers in my city, Denver, can earn $21- $25+ per hour, this is my part time go to when starting a company so I know this is true. That reason is not the store which usually pays $9 per hour on average per driver. The reason is the bizarre nuances of the delivery game.
It does not matter whether you are driving for brown (UPS), FedEx, or Papa Johns. That extra mile can make your business.
The right industry will always be long haul trucking, train engineering, and, to a lesser extent, air travel. Anywhere the task is more monotonous and there is no customer service, people are more replaceable. For the food industry, that means the back of house.