Walmart is testing self-driving car delivery in partnership with Ford and Argo AI
Walmart (WMT), Ford (F), and self-driving car startup Argo AI announced Wednesday that they are working on launching an autonomous delivery service in three U.S. cities. The benefit of delivering Walmart online orders will be by Ford vehicles with the Argo AI self-driving system.
Walmart (WMT) could be the first major company to deliver online orders to its U.S. customers using self-driving cars.
Walmart’s partnership with Ford Motor (F) and self-driving car systems startup Argo AI launched an autonomous delivery service in three U.S. cities.
Ford Escape hybrids with Argo AI’s computer-assisted self-driving system will deliver online Walmart orders to customers in Miami, Florida, Austin, Texas, and Washington, DC as part of the collaboration.
The companies said the new service will launch later this year and will expand over time.
Brian Salski, founder and CEO of Argo AI, said focusing on three cities will show “the potential for massive self-driving vehicle delivery services.” Testing of the service by companies began in Miami in 2018.
For Walmart, this is an opportunity to continue to expand its digital sales business, Walmart + subscriptions, and compete with e-commerce giant Amazon (AMZN). In addition, its financial capabilities allow it to create its fleet of self-driving vehicles for delivery.
Walmart saw a surge in online sales during the pandemic, with digital sales up 79% in the last fiscal year ending January 31. However, the company hasn’t made a profit from its e-commerce business, forcing management to invest more and look for efficient delivery methods.
Late last month, Walmart announced the launch of Walmart GoLocal. This offering allows small and medium-sized businesses to leverage their nationwide logistics network, including drone-powered delivery capabilities as they evolve.
Analyst firms predict e-commerce growth will continue regardless of pandemic conditions, so companies need to build robust delivery infrastructure.
Walmart participates in pilot self-driving car delivery programs with Gatik and Cruise, supported by General Motors (GM). In addition to the partnerships, Walmart acquired an undisclosed stake in Cruise earlier this year.
Argo AI, which Ford jointly owns with German automaker Volkswagen, is testing self-driving cars in other cities. Ford and Argo AI are also working on an autonomous vehicle pilot sharing with Lyft (LYFT).
The commercialization of self-driving cars has proven far more challenging than many predicted a few years ago. However, the problems have led to general partnerships in the sector, in which companies make joint investments.
Some companies, such as Uber Technologies (UBER), have given up on developing their systems, while others, such as Zoox, have sold their business to Amazon. However, alphabet’s Waymo (GOOGL, GOOG) remains a top-level leader with a fleet of self-driving cars in Arizona.
