Argo AI will help Walmart deliver with self-driving cars
History is full of rivalries: Coca-Cola versus Pepsi, Star Trek versus Star Wars, good versus evil. The list could go on forever. One of the epic battles of our time is Walmart versus Amazon. These two retail giants have been on a collision course for years, as they increasingly compete on the same turf.
Amazon strengthened its position after acquiring Whole Foods and opening Amazon Go. Walmart has largely focused on e-commerce and digital technology, building its own online marketplace and adopting artificial intelligence and robotics. Now the company is offering a delivery service using autonomous vehicles, powered by technology developed by the startup Argo AI.
Walmart moves toward automation
The company has drawn the attention of new investors with its announcement of a partnership with Argo AI and Ford to create a self-driving delivery service in three cities. It is not yet clear whether this decision is a long-term strategy or a publicity move.
Walmart's recent financial filings with the Securities and Exchange Commission contain no explicit discussion of Argo or robotic delivery. However, the company appears to be focused on building delivery services. In 2020 it launched the Walmart+ membership program, which offers, among other benefits, unlimited free delivery from stores as well as discounts on fuel and prescription drugs.
The company has rolled out NextDay Delivery to more than 75% of the US population, launched Delivery Unlimited in 1,600 locations across the US, and expanded same-day delivery to nearly 3,200 locations.
The self-driving startup
Pittsburgh-based startup Argo AI has quickly established itself as one of the key companies in the race for self-driving cars. It has attracted $3.6 billion in investment from Ford and Volkswagen, each of which owns 40% of the company. In July 2021, ride-hailing company Lyft invested an undisclosed sum as part of a partnership to deploy a fleet of 1,000 robotaxis. Argo is currently valued at $7.25 billion.
The company is developing its own autonomous driving system, which has been integrated into the hybrid-electric Ford Escape and the fully electric Volkswagen ID Buzz AD. Argo has also developed its own LiDAR, a technology that uses lasers to scan the surrounding environment. The technology has a range of more than 400 m with 360-degree rotation for full coverage.
The software is ArgoWatch, a cloud platform that tracks and manages all aspects of the fleet over a high-speed LTE connection. In addition to managing routing and route planning, the platform monitors resources such as fuel levels and battery charge.
It also sends signals to individual vehicles or the entire fleet about unexpected road closures, construction work, or even detour routes detected by onboard sensors. Argo currently has a fleet of self-driving test cars operating in six US cities: Miami, Austin, Pittsburgh, Detroit, Palo Alto and Washington. Expansion to two German cities, Munich and Hamburg, is planned soon.
Argo and Lyft
In 2021, Argo announced its first major contract to expand a fleet of 1,000 self-driving vehicles with Lyft, starting in Miami and Austin. ArgoWatch will be integrated directly with the Lyft ride-hailing app to pre-position cars in high-demand locations, such as concerts or outdoor sporting events, so vehicles are ready to pick up all customers.
Argo also uses anonymized Lyft service and fleet data to identify markets where self-driving cars can have the "most positive impact on cities and individual community members," and to keep building its safety system by analyzing driving characteristics, accidents and fatalities.
Argo then uses all this information to measure the performance of its self-driving system on specific streets, creating what it calls a "geonet" or network of streets where the company can operate its fleet safely. The most recent high-profile accident happened in 2018 in Pittsburgh, when two people were taken to hospital.
Walmart and self-driving delivery
Now Argo will put its self-driving cars on the streets of Austin, Miami and Washington to deliver goods to Walmart customers. The Argo partnership is far from Walmart's first experience with autonomous vehicle delivery.
In 2019 the company announced a pilot program for grocery delivery using driverless robotic vehicles developed by Nuro. In 2020 Walmart launched another delivery pilot with Cruise, a separate company owned by General Motors.
“For many years we have done a lot to learn more about the role of autonomous vehicles in retail, and we have seen enough to understand that the question is no longer whether they will scale, but when. These investments will help us develop a last-mile delivery ecosystem that is fast, affordable and scalable”
The company takes self-driving technology very seriously and appears to be hedging its risks by investing in a range of solutions. Walmart can afford to play the long game.
