Amazon’s Zoox Acquisition could become a threat for three Industries’ major players
The tech and automotive industry alike are abuzz with the news of Amazon acquiring Zoox, a California based startup that develops autonomous driving technology in a deal estimated to be worth over $1.3 billion.
Amazon announced in late June that they are acquiring Zoox “to help bring their vision of autonomous ride-hailing to reality”.
After analyzing Amazon business strategy, it is evident that acquisitions are a regular exercise for the tech giant. And the company knows how to leverage acquisitions to open a new business area for a company.
Jeff Wilke, Amazon’s CEO, Worldwide Consumer said “Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience. Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”
“Since Zoox’s inception six years ago, we have been singularly focused on our ground-up approach to autonomous mobility,” said Jesse Levinson, Zoox co-founder, and CTO. “Amazon’s support will markedly accelerate our path to delivering safe, clean, and enjoyable transportation to the world.
Founded in 2014, Zoox’s vision was to create purpose-built, zero-emissions vehicles designed for autonomous ride-hailing, along with an end-to-end autonomy software stack. Zoox’s ground-up vehicle focuses on the ride-hailing customer, with tightly integrated features designed to provide a revolutionary passenger experience.
Their autonomous rides have been developed as bi-directional vehicles with no steering wheel or discernible front or back end, allowing it to comfortably travel in either direction.
Zoox’s overall company mission will also remain the same with current CEO Aicha Evans continuing in her role, as well as CTO and co-founder Jesse Levinson according to Amazon’s announcement.
Amazon Could Disrupt Ride-Hailing Business
This indicates that Amazon may not integrate their vehicles with their other delivery service alternatives, but Zoox’s ground-up technology could easily be used to run alongside Amazon delivery drones and other methods of delivery.
But if Zoox truly does stay on the path of passenger ride-hailing services, this could open up a whole new business sphere for Amazon.
And that would certainly be problematic for ride-hailing services.
Amazon’s entry in the ride-hailing business could be problematic for Uber and Lyft especially when autonomous vehicles are going mainstream.
Amazon's worth and reputation certainly a threat for companies like Uber and Lyft who are far behind than Amazon.
Amazon can easily utilize its Prime members to give a discount or countless offers to take its ride-hailing services. And with more 110 million members in the US alone, Amazon could make a great start in the new business.
Food Delivery Business in the Radar too
Nuro has shown how autonomous vehicles can be used for food and grocery delivery. Amazon has already shown its interest in the area and with the technology in hand, the company could try to enter the game in the US too.
Amazon launched a food delivery business in India during a pandemic when top players like Zomoto and Swiggy had to reduce its staff. The service is currently available in Bangalore but Amazon is going to go big for sure.
India is currently a huge market for the food delivery business but using autonomous vehicles for the service would be near to impossible. India has a very different road condition than the US, further India is not ready for autonomous vehicles now.
But Amazon can use the experience to make a huge impact in the US.
Amazon Logistics Already Hurting FedEx and DHL
Amazon has already become a problem for logistic players like FedEx and DHL as the giant is shipping 50% of the products itself. And in the coming times, the number will be growing for sure.
With every vehicle-related service going to autonomous, logistics is bound to happen to go autonomous. And when it's become a huge part of Amazon's core business, Amazon would sure apply its technological expertise in the business to make it better. And it certainly means bad bad news for FedEx and DHL.
Conclusion
In short, Amazon’s latest acquisition says a lot more than what meets the eye.
Apart from the Zoox acquisition, there have been other concrete proof that shows Amazon to enter the autonomous vehicle market.
The company had invested in autonomous driving startup Aurora and it has tested self-driving trucks powered by self-driving freight startup Embark.
Since Amazon has been aggressively investing and researching in the domain of autonomous vehicles and various automated methods of delivery.
Amazon has approx 231 patents filed on technologies related to drones and vehicle automation and Zoox has 347 patents in its portfolio.
Hence it’s important to understand the business strategy as Amazon’s advancements in this field could spell disruption for the worlds of ride-hailing, food delivery, and logistics.