New Zealand native Dave Ferguson is co-founder and president of Nuro, the driverless delivery vehicle company that’s now testing deliveries with Kroger.
Jon Springer: Welcome to the Breakroom, Dave. Why in your opinion are local deliveries the right deployment for self-driving vehicles?
Dave Ferguson: There are two main reasons why using self-driving vehicles for local deliveries makes a ton of sense: First, local delivery is a massive market opportunity with a need for improvement, and second, we have the ability to create safe self-driving delivery services for consumers to use today. When you look at the number of personal vehicle trips taken in the U.S., Americans make a total of 220 billion of them a year, and more than 20% are for shopping and other errands. We want to help consumers spend less time in the car, which is why we created the first fully self-driving on-road vehicle to transport goods—to give people more time to spend doing the things they love.
Second, by developing our own custom self-driving vehicle, we are able to design for the safety of road users. By eliminating the passenger from delivery, we are able to create a smaller vehicle that is safer—keeping what’s on the outside safer than what’s inside. This allows us to put these vehicles on the road sooner than self-driving passenger vehicles.
Can you briefly describe how the partnership with Kroger came together? Did they call you or did you call them?
We had been in discussion with Kroger for some time and during our initial discussions, learned that we shared a common vision for the future of local commerce. We’ve always been impressed by Kroger being a household name and the world’s largest grocer with 2,800 stores in 35 states. We partnered with Kroger to improve and expand the grocery shopping experience, making the convenience of grocery delivery accessible to everyone.
A startup robotics company and a more than 100-year-old grocer are obviously very different things. What has Nuro learned from Kroger over the partnership? And what, in your opinion, can grocery companies learn from tech startups such as yours?
Grocery is an $850 billion market in the U.S., and our work with Kroger is advancing this industry, transforming the way people receive goods. In our first joint pilot in Scottsdale, Ariz., we learned how to provide a new type of service that consumers love, evolving the grocery delivery model with robotics, automation and a digital experience. In our partnership with Kroger, we’ve created an entirely new platform for local commerce: democratizing the on-demand economy for consumers and making grocery delivery accessible and affordable.
What would you point out as the most encouraging signal? And what did the tests indicate still needs work?
We launched our autonomous delivery service in Arizona in 2018, and have safely and successfully completed thousands of deliveries to customers. The launch’s success showed us there was an appetite for autonomous delivery services, leading us to expand our offering to Houston.
During both pilots, we’ve learned how to best facilitate natural, easy interactions between people and robots. Feedback from the Kroger delivery customers helped the team develop a deeper, first-hand appreciation for the operational challenges that come with executing high-quality deliveries. Learnings like this have helped us prepare as we continue to scale.
Some critics say robot delivery effectiveness could be hindered by the “last 30 feet”—from the curb to the customer’s door. Are you thinking about how to solve that problem?
Our goal is to increase convenience and drive down costs associated with everyday errands. Curbside limits will continue to exist for self-driving vehicles, but the boom in the on-demand economy—with courier services like UberEats and Postmates—has led a large portion of shoppers to become accustomed to picking up their deliveries curbside. There will always be customers for whom the cost and convenience benefits of curbside delivery do not outweigh the benefits of door delivery–but when considering the alternative time and expense of trips to the grocery store, autonomous deliveries are still a clear improvement.
What was your first job?
I was a research scientist at Intel right after grad school.
Who does the food shopping for your family, and where does it get done?
Everyone in our household shops, and far too often. We have two little kids, and they always seem to need something. We have two little kids and always seem to need something. Mostly it is at our local grocery store, which happens to be a Whole Foods.
You’ve tested in Arizona and now Houston with Kroger. Where else might we encounter Nuro vehicles on the roads this year?
We currently operate in California, Texas, and Arizona. This year we’re looking to expand in all three states.