The Amazon of transportation
By Joann Muller, Axios
Amazon is emerging as a transportation juggernaut that could threaten carmakers, package delivery firms and even ride-hailing companies.
Why it matters: By building its own logistics ecosystem and investing in promising electric and autonomous vehicle startups, Amazon could lower its shipping costs to the point that partners like UPS become competitors instead.
What’s new: Amazon is in advanced talks to buy self-driving tech startup Zoox, the Wall Street Journal reported this week.
A deal, if it happens, would follow big investments in another automated driving startup, Aurora Innovation, and Rivian, a maker of electric trucks.
The news set off a wave of speculation among investors and AV experts.
Self-driving technology is “a natural extension” of Amazon’s efforts to build its own logistics network, and could save the behemoth more than $20 billion a year on shipping costs, Morgan Stanley analysts wrote on May 27.
Amazon is becoming a “clear competitor” to companies like Tesla and GM, they said, while UPS and FedEx “will need to respond to keep up.”
— Morgan Stanley auto industry analyst Adam Jonas, in a May 17 report
The intrigue: Buying Zoox could potentially even open the door for Amazon to compete in the ride-sharing and food delivery industries.
Discounted ride-sharing for Prime members, for example, could help Amazon attract and keep more customers, Morgan Stanley suggested.
Amazon has more than 210 transportation-related patents on everything from drones to automated ground vehicles, according to a Reuters analysis.
Among them is a 2017 patent to provide an on-demand transportation service through a network of self-driving vehicles, Reuters reported.
This article first appeared at Axios | Navigate on May 29, 2020.