Amazon Zoox – Much ado about nothing.

Zoox promotes everything but its future.

• Zoox has unveiled a product and a service which has very little if anything to do with its long-term future.
• Zoox’s approach before its acquisition by Amazon (see here and here) was an Apple-like fully integrated approach to robotaxis.
• This meant designing both the vehicle and the service from the ground up which is why it ran out of money allowing Amazon to acquire the company at a substantial discount to its last raise.
• The fruits of the last 6 years were unveiled yesterday with the launch of the Zoox vehicle, which is level 5, fully electrical and can reach speeds up to 75mph meaning that it can also travel on the highway.
• The vehicle essentially looks like a shuttle but its most ingenious feature is its symmetry meaning that it can drive in either direction with equal manoeuvrability and speed.
• This makes it ideal for tight urban spaces as reversing and 3-point turns become a thing of the past.
• Zoox has also announced its intention to offer a robotaxi service starting in San Francisco and Las Vegas but I have a sneaking suspicion that this is not going to amount to very much in the long term.
• This is because I think that Amazon did not buy this company to move people around but instead to move goods.
• Amazon’s spending on order fulfilment and, especially the last mile, frequently plays merry hell with its profitability and Zoox offers the possibility to bring that much more under control.
• Hence, autonomous vehicles that are designed for the delivery of goods over the last mile makes far more sense than a service where every man and his dog are going to compete and where the margins are going to be razor-thin.
• Hence, while the results of robotaxi development can be re-used in the development of goods vehicles, I suspect that Amazon is happy to play along but when billions are needed for marketing and scale, then the big foot will be put down.
• All of the things that Zoox is working on now such as the design of the vehicle and the software to allow it to drive autonomously pretty much fit into this category for re-use and so I think that nothing is going to change for a while.
• This is especially the case as I don’t see autonomous vehicles reaching real commerciality much before 2028 meaning that Zoox still has a lot of work to do.
• Once this milestone has been hit, I think Amazon will rapidly re-allocate Zoox’s resources towards designing and launching a last-mile delivery system which if successful will offer a huge return on investment for Amazon.
• I think that Zoox has found a good home at Amazon but any dreams of dominating the robotaxi and ride-hailing industry are likely to go unfulfilled.
• Its future is far more boring but likely to be infinitely more valuable as a result.