Automotive Blogs

The COVID-19 Economy

by Roger Lanctot | Oct 13, 2020

Three years ago, Intel and Strategy Analytics collaborated on a report that imagined a world of the future that would be defined by automated vehicles with goods and services delivered to consumers where they lived or consumed on the fly in those vehicles. This vision, which was expected to unfold over decades creating a $7B passenger-centric economy by 2050, may be arriving sooner than anticipated.

Accelerated by the onset of the COVID-19 pandemic, elements of the Passenger Economy have already begun to emerge as on-street parking is replaced by delivery-related uses of curbsides and food, grocery, and package delivery are rapidly exceeding the movement of people. In fact, until ride hailing operators can offer a safer operating environment by implementing in-vehicle partitions and other measures their non-employee drivers will be focused on growing parcel delivery propositions – which are attracting significant investments.

The first phase of this acceleration has humans jumping back into their individually owned and operated cars – picking up purchases at curbsides, viewing outdoor events from inside vehicles, but mainly getting a lot of deliveries to homes. This new normal is forcing a reconsideration of destination shopping and entertainment – in favor of personalized, mobilized experiences.

The Information reports that:

  • Grocery delivery service Instacart raised $200M in a new financing. The deal values Instacart at $17.7B.
  • GoPuff, the Philadelphia-based firm known originally for delivering convenience food items, said it raised $380M at a $3.9B valuation. GoPuff also said it was expanding nationwide and would broaden the range of products it delivers to include groceries, over the counter medicines and baby products.
  • DoorDash and Uber Eats are both expanding into grocery delivery.

Meanwhile, new and used car dealers are turning to touchless strategies such as online sales, vehicle delivery, and remote service to overcome the concerns of consumers uneasy about visiting dealerships. Draiver is a several-year-old startup with a network of 5,000 drivers moving vehicles between dealerships and auction houses and, increasingly, adding remote vehicle appraisals, and service pickup and dropoff. The company recently filed the 10th patent for its automated dispatching platform.

This bring-it-to-me mentality is only just beginning to take hold, but it is a radical shift from just a year ago. The inclination toward convenience has been compelled by a need for safety.

Online retailers such as Amazon, Craigslist, and others are re-evaluating their product delivery and exchange strategies. Amazon may be the most extreme case opening multiple retail formats while building out an ever-expanding network of distribution centers and preparing to launch a fleet of as many as 100,000 Amazon Prime Vans, with the help of Rivian. 

CNET: “Amazon Operators Seven Different Kinds of Physical Stores. Here’s Why” - https://www.cnet.com/news/amazon-now-operates-seven-different-kinds-of-physical-stores-heres-why/

While Amazon is embracing so-called brick-and-mortar operations and exploring drone product delivery it is only a matter of time before mobile Amazon retail operations manifest – as forecast in the Intel-sponsored “Passenger Economy” report. All of this is taking place in a broader context of retail and delivery experimentation.

Toyota’s e-Pallette is the most high profile example of a mobile retailing and service delivery proposition modeled on the vision defined in the “Passenger Economy” report. Toyota has taken its concept even further by envisioning its Woven City built entirely around self-driving e-Pallette vehicles moving people, goods, and services.

Facebook is now getting into the game partnering with startup DeliverEnd for local deliveries of local purchases made in the Facebook Marketplace. Currently testing the concept in Indianapolis, DeliverEnd has aggressive expansion plans to arrange local deliveries throughout the U.S. and beyond.

DeliverEnd is the latest example of meeting the “last mile” delivery challenge, focusing, as it does, on local product exchanges for purchases made within Facebook’s Marketplace or Craigslist or any of hundreds of similar applications. DeliverEnd provides a safe seamless service intended to protect both buyers and sellers.

DeliverEnd uses a multi-step process encompassing a mobile app, live chat, screened and approved drivers, and escrowed funds. In these ways, DeliverEnd has eliminated the customer fear of meeting a stranger in an unknown location with a handful of money for a product they know little about. DeliverEnd is headquartered in Indianapolis and is currently operating there in a fast-ramping pilot mode. 

The business of delivering goods and services will be a $3T marketplace by 2050, according to the “Passenger Economy.” In the meantime, companies large and small will continue to bite off chunks of that business as they seek to exploit consumer demand for safer, remote interactions with product and service providers. Shared in-vehicle experiences will return with enhanced passenger protections and physical anti-viral measures. It’s clear, though, that COVID-19 is accelerating the evolution toward this passenger economy.

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