How Amazon’s Move into Automated Vehicles Could Fuel Even More Growth
Suppose: You are going to work and think you did not remember to order laundry detergent from Amazon. You state, “Alexa, order detergent,” then the virtual assistant verifies your selection of price, size, and brand. When you go to work, you get a call from your wife, and she says that she needs the car early, and your daughter needs to go to the shopping mall.
You tell her, “Don’t worry.” You open the Amazon application on your smartphone, schedule a car to pick your wife, pick your daughter for the shopping mall, and return to get you later that day.
It can be the future that Amazon thinks of attaining Zoox, a driverless start-up.
What is Zoox?
Well! Zoox can quickly solve a lot of problems for Amazon. Currently, Zoox needs to design software and build vehicles for self-driving automobiles. In comparison to heavyweight contestants like Tesla and the Waymo business of Alphabet, this job appears demanding. Still, Amazon has not been scared to make significant bets to make big returns.
The benefit of Zoox in comparison to its associated is its emphasis. The company does not aim to make mass-market cars similar to Tesla. Instead, it concentrates on small fleet vehicles mainly made for ridesharing in a tough environment, such as some of the test routes in San Francisco.
One reporter wrote after taking a test ride on Zoox, “My trip in the Zoox was more relaxed than those I took through Lyft and Uber on my way from and to the airport.
Jesse Levison, the co-founder of Zoox, has revealed that the cards are not designed for particular ownership but sharing. The system of the company uses lidar, radar, and cameras on the car’s four corners, which are likely to constitute two batteries with a significant capacity as compared to signal battery options accessible nowadays.
Why Should Amazon Buy Zoox Now?
The increase of one-day shipping, and the combination of the pandemic, assisted Amazon’s increase of total sales by 26% annually. But the investments in the future caused the capital expenditures of Amazon to increase 106% to 6.8-billion-dollar year over year.
Besides, Amazon spent around 11.5 billion dollars on fulfillment, which amplified by more than 33 percent every year. When two high costs are increasing faster as compared to sales, it is the issue that needs to be addressed.
For Zoox, Amazon paid 1.2 billion dollars. It may remind you of the previous attainment of Kiva Company for 775 million dollars in 2010. The robots of Kiva were deployed to reduce the fulfillment and personnel amount.
It was recommended in 2017 that these robots saved Amazon as much as 22 million dollars each year at the warehouse. The next current value of the acquisition was estimated as having an amount of around 15 billion dollars. Zoox would help reducing the fulfillment cost by 3 percent to be worth 1.2-billion-dollar cost. And yes! Of course! Amazon hopes to do a lot better as compared to that.