in quest to own food delivery market last mile robot ...€¦ · 12/16/2019 last mile robot...

12/16/2019 Last Mile Robot Launches Snowy Pilot In Quest To Own Food Delivery Market

https://www.forbes.com/sites/martineparis/2019/12/15/last-mile-robot-launches-snowy-pilot-in-quest-to-own-food-delivery-market/#5e2b27fe6b7f 1/9

256 views | Dec 15, 2019, 11:57pm

Last Mile Robot Launches Snowy PilotIn Quest To Own Food Delivery Market

AI

Martine Paris Contributor

Refraction AI plowing through first snowstorm

in pilot launching in Ann Arbor,

Michigan REFRACTION AI

Neither snow nor rain nor heat nor gloom ofnight stays these couriers from the swiftcompletion of their appointed rounds.

The postal creed dates back to Ancient Greece anperhaps foretells the next chapter of ecommerceas Refraction AI robots take to the snowy streetsof Ann Arbor, Michigan to pilot their online fooddelivery service.

As their robot navigates dense urban passages toget grandma her hot bowl of soup, Refraction’sfounders, Matthew Johnson-Roberson and Ram

Vasudevan, cheer it on through their teleoperated control room, keeping their eyes onthe prize of solving the logistics problem of the soon-to-be $200 billion online fooddelivery market.

What has been widely reported on is that GrubHub, DoorDash, Postmates and Uber Eahave been losing money hand-over-fist on the last mile, and while GrubHub is the onlyone that is profitable overall, in a letter to shareholders regarding disappointing third-quarter earnings, they explained why the current model of food delivery might never beprofitable. “Bottom line is that you need to pay someone enough money to drive to therestaurant, pick up food and drive it to a diner. That takes time and drivers need to beappropriately paid for their time or they will find another opportunity. At some point,delivery drones and robots may reduce the cost of fulfillment, but it will be a long time

https://www.forbes.com/sites/cognitiveworld/people/martineparis/

https://www.forbes.com/ai


https://refraction.ai/

https://ww2.frost.com/frost-perspectives/the-soon-to-be-200b-online-food-delivery-is-rapidly-changing-the-global-food-industry/

https://s2.q4cdn.com/772508021/files/doc_financials/2019/q3/October-2019-Shareholder-Letter.pdf



Refraction AI CEO and co-founder, Matthew

Johnson-Roberson DROP LABS

before the capital costs and ongoing operating expenses are less than the cost of payingsomeone for 30-45 minutes of their time.”

Today In: Innovation

As the competitive landscape fills with sidewalk delivery robots (Starship TechnologiesKiwibots), road delivery robots (Nuro, Udelv), drones (Amazon Prime Air), and scooterrideshares (OjO) all in search of driving down cost per delivery, Refraction’s last milerobot might just have found a passage through the bike lane with its cleverly designedlow cost state-compliant transport that can operate autonomously through the harshestweather conditions.

Not one to shy away from a good challenge,Johnson-Roberson has traveled the toughestterrain on the planet to solve some of the world’smost complex problems with AI and robotics. Asa Carnegie Mellon undergraduate, he competed inthe 2004 DARPA race across the Mojave desertunder the tutelage of autonomous vehiclepioneers Red Whittaker and Chris Urmson. Whilegetting his PhD from the University of Sydney, heventured to the bottom of the sea withunderwater robots to understand the effects ofclimate change on the Great Barrier Reef. Nowhe’s in the snowbelt of America’s Heartland where he heads up the University ofMichigan’s robotics department, DROP Lab, and Ford Center for Autonomous VehiclesIn 2015, his lifetime achievements were recognized by the National Science Foundationwith the prestigious NSF Career Award. But he’s just getting started.

I had a chance to talk with him about his founder’s journey, what makes his last milerobot a product-market fit, and how startups should be thinking about social impactfrom the get-go. What follows is an edited transcript of our discussion:

How did you meet your co-founder, Ram Vasudevan? Were you collegeroommates?

https://www.forbes.com/ai

https://www.starship.xyz/

https://www.kiwibot.com/

https://nuro.ai/

https://www.udelv.com/

https://www.amazon.com/Amazon-Prime-Air/b?ie=UTF8&node=8037720011

https://ojoelectric.com/

https://droplab.engin.umich.edu/

https://fcav.engin.umich.edu/



When he joined the University of Michigan faculty, I tried to get him to be myroommate. I was renting this big house and invited him over. He took one look, and sai“Nah, I’m good.” Haha, he did not want to live with me but we became fast friends andhave been working together ever since.

In 2016, we founded the Ford Center for Autonomous Vehicles together and as webecame frustrated with how long it was taking industry to bring robo taxis to market, wdecided to try it ourselves. That was the genesis for founding Refraction AI.

How did you get funded?

The first few years we bootstrapped and built the robot in my garage. Cold and dark, itwas great place to do physical hardware. Then this past March, we raised $2.5 millionfrom eLab Ventures and Trucks Venture Capital. Doug Neal, who is an eLab partner, haclose ties to UM having previously run the Center for Entrepreneurship. He joined ourboard and helped us spin out of the University. We knew Reilly Brennan and Jeff Schoxfrom Trucks VC mobility events like their Das Tegernsee conference (produced with RoConeybeer of Shasta Ventures).

December 12 you launched your first pilot in Ann Arbor. How’s it going?

It’s been very exciting. We now have over 250 people signed up for deliveries, fiverestaurant partners, 15 full time employees, and tons of snow! We have 5 vehicles rightnow and should be close to 12 or 15 by end of February.

What are your plans for scaling?

We are in the midst of raising our Seed+ to expand our fleet to 70 vehicles, 30 to max oAnn Arbor, and 20 for other deployment cities like Boston and Palo Alto. Palo Altobecause it’s a great place to be in front of a lot of capital and Boston because we want toshow we can operate where the weather is harsh, terrain is challenging and driving isdifficult. Both cities are in college towns with a population of hungry students who arequick adopters of new technology, density of restaurants, and states that have robust AVand e-bike regulation that we can use in tandem to get statewide deployment.

http://elabvc.com/

https://crunchbase.com/organization/michigan-elab

https://www.trucks.vc/

https://www.forbes.com/sites/martineparis/2019/10/30/the-smart-portfolio-of-rob-coneybeer/#766020e5719b



Starship Technologies sidewalk delivery robots

make food deliveries on college

campuses STARSHIP TECHNOLOGIES

Full sized AV Nuro just launched pilot with

Walmart NURO

Other areas high on the list to deploy to as we get to scalability over the next two yearsinclude Pittsburgh, Madison, and along the Eastern seaboard down to Florida.

Is there any region you’re not planning to deploy to?

New York City just banned e-bikes for delivery so we’re not going there.

It’s a gold rush right now chasing the lastmile, what differentiates you from thecompetition?

We operate in the street which is regulated by thstate and has less regulatory and technicalchallenges than operating on the sidewalk whichis regulated by the city. Sidewalk delivery robotsneed to comply with regulations in every city the

want to operate in. That’s a big challenge with scaling that model.

We’re also not a car as we meet all of the classifications of a Class 2 E-Bike which isalready legal in most states - our motor is under 500 watts, weighs 100 pounds, andtravels at 12 miles per hour. This means vehicle and safety requirements are easier tocomply with. That’s a huge win for us.

The risk with a full size autonomous vehicle isthat if you get hit with it traveling 35-40 mph,there could be a fatality (as in the case of Uber inTempe), but our vehicle moves slowly and is verylight, similar to a small child riding a bicycle, sothe impact risk is very low. If something dashes infront of it, its sensor modalities - cameras,ultrasound, radar, LIDAR - pull it to a stop andbecause it’s so light and slow, our teleoperatorscan takeover quickly and safely. This addresses municipality concerns over having ahuman there if something goes wrong.



Postmates Delivery Robot in teleoperations

pilot powered by Phantom Auto PHANTOM AUTO

Also it makes no sense to use a 4,000 pound vehicle to deliver one hamburger and coulbe done much lighter and easier in the bike lane while reducing pollution and congestioon the road.

What is your ratio of teleoperators to vehicles?

One operator manages three vehicles but in time one operator will be able to manage upto six vehicles. Our teleoperators are highly competent, they go through an extensivetraining program and are provided with comprehensive manuals and resources. Theywork in shifts with no less than two people on at any given time. As we expand, we’replanning on keeping teleoperations in Ann Arbor because of our skilled workforce andlower operating costs.

What does the journey of your robot looklike?

An order is placed and the robot leaves the depofrom our downtown Ann Arbor offices throughbig roller doors. It goes down an alley into thestreet and then proceeds to the restaurant. ARefraction tablet sits alongside DoorDash andGrubHub’s tablets at the restaurant. When the

order comes in, the food gets prepared and the tablet tells the restaurant when the robohas arrived. Restaurant staff place the food package in the robot and the robot thenproceeds to the customer’s house. As it approaches its destination, it texts the customerwho can specify where the robot should drop off the food, like alongside a porch or in thdriveway.

Along the route, complex crossings and known hazardous conditions have been micro-geofenced and a teleoperator is signaled to takeover as the robot approaches. We use amultiple modem system that ensure that communication is always maintained with therobot even when there is congestion.

What is in your tech stack?



We’re focused on having what we need to drive but keeping the cost of the platform lowA different approach than a Cruise car which has over $100,000 of equipment on itsroof. Ultimately it’s very difficult to figure out any business model for delivering $12 ofMcDonald’s in a vehicle that costs more than a Bentley.

So we’ve engineered our vehicle with 12 cameras, some with a very wide field of view lik200 degrees, some more narrow like 90-100 degrees. This spread out field of view allowus to see 360 degrees around the vehicle and perform depth estimation with a high leveof fidelity that enables the vehicle position itself with respect to parked cars and lanes.We also have sensors that make sure we’re being safe like ultrasound that beeps in a carwhen things get close. Ultrasound works really well over short distances for blind spotdetection but isn’t used on a full sized vehicle like Cruise or Waymo because you can onsee 5 to 8 feet with it. It’s not useful if you’re going 30 miles per hour, but because we’regoing 12 miles per hour it’s an incredibly viable sensor for maintaining safety of wherethe vehicle is. We also use millimeter wave radar and Livox LIDAR system which costsunder $500 which gives us another modality for optical detection to make sure we don’run into things. For cloud services, we use both AWS and Google.

At the crux of all of this is our AI deep learning system that provides rich depthestimation using all 12 cameras together with 360 point cloud to do object detection ansegmentation.

What type of data are you collecting? What can your cameras see?

We collect depth data. Telemetry and control information is processed locally on thevehicle and sent back for navigation. The cameras see a point cloud of a human outlinesimilar to how body scanners see a depth map. Images appear as blobs, not uniquelyidentifiable photos of people. We also collect valuable data for cities related to potholesroad damage and accidents. And we collect food data because that is what is beingtransported.

Do you have concerns about theft or vandalism?

I grew up in New York City in the 1980s and remember the high crime era. I knowscooters have a life of three to four weeks due to theft and vandalism, but it’s not really concern for us. Our vehicle is kind of bulky so it’s not easy to pick up and throw like



scooters which we’re getting tossed into the Bay. Our vehicle transports only food, nothigh value items like cash. It costs about $4,000 but is in constant motion, in the streetwith sensors, cameras, a GPS, and a speaker with a teleoperator that sees what’shappening and can say, “Hey.” When our vehicle is done on its journey it comes home ta locked depot. It’s not parked on the street overnight.

What is your cost per delivery?

At steady state, we’ll be around $2-$2.50 per delivery, significantly less than the $11-$1per human delivery reported by publicly held companies.

Do you see your platform doing partnerships with DoorDash, Postmates,GrubHub and Uber Eats?

Ultimately we want to offer this as a service to anyone who wants to move goods safelyand quickly around a city. At the end of the day, there are going to be a number ofmarkets and verticals that we can go into. Food delivery is easy because it’s a wellestablished market. There is a ton of customer demand and current solutions are notgreat. In the long, run there are pharmaceuticals, small packages, and a host of things wwant to deliver. The market potential is massive.

Right now, the food delivery apps are struggling with how to make the unit economicswork. They charge restaurants upwards of 30% revenue share and on the consumer sid$10-12 for delivery. It’s a difficult business. If you talk to the drivers, they’re not greatjobs. Some don’t even make minimum wage and most rely heavily on tips. There are bigstructural changes happening in the gig economy and new laws are going into effect (seCalifornia Assembly Bill 5 - The Gig Worker Bill).

People are accustomed to getting things on demand and demand has been outpacingexpectations on every front, but we’re exploiting humans workers to do it and that’s notright. There’s a lot we can do to think about the ways we’re servicing that demand. Ourgoal is to create a way that is not just economical but sustainable.

It sounds like you’re not a proponent of the gig economy. Will you remainan employee-only company and not use contractors?

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB5



I am not a proponent of the gig economy. I believe as we try to build a fair and more juseconomy, we need to employ people and give them healthcare and purpose. I’m fine witexploiting robots. You can work them 24 hours a day and cut costs to make them ascheap as possible, and at the end of the day it’s just a robot, not a person. We want toinvest in our employees and build something we care about. It’s a better model thantrying to squeeze people as much as you can to make your margins higher.

What do you think about autonomous vehicle companies who say they arenot at parity with hiring women because they can’t find enough qualifiedcandidates with the right experience?

The pipeline issue is a copout. Ultimately what has been revealed to be false about thosnarratives is that the employment rate has dipped below 4%. You need to train peopleand invest in them early.

If you’re trying to build a future that makes the world better for everybody, you need toinclude everybody in that process. If you don’t have representation, you’re only going tomake the world better for a very small and limited segment of the population. I’m notsure you can even achieve the goals that you have for making the world a better, saferand more sustainable place if you don’t have a diverse workforce.

We think about the bias that goes into hiring, the way resumes are read, whereinterviews take place etc. To ensure that implicit biases don’t creep into the hiringprocess and we look broadly for candidates with different backgrounds. No one has theright experience with building these robots because we’re building the first ones. Youneed to hire smart people who care about people, the planet, and the technology, andyou can find them across every spectrum of the human experience.

You’re heading off to CES, what are you hoping to see?

I’m always looking for better depth cameras, Intel has a few. I’m also hoping to find tofind faster purpose-built AI chips that can run deep learning networks on a lower powebudget, ones running on 10 to 15 watts as opposed to 100 watts that could increasebattery charge from 12 to 24 hours and range from 50 to 100 miles. That would make ahuge difference in unit economics.



Silicon Valley freelance tech reporter covering AI, robotics, consumer tech, connected home,

autonomous vehicles, gaming, retail, e-commerce, security, privacy, payments and fintech for Fast

Company, VentureBeat and other top outlets. Named CES 2020 Media Trailblazer by the Consumer

Technology Association for excellence in reporting, she is a frequent speaker at leading tech

conferences including CES and SXSW. Follow her on Twitter @contentnow. Read Less

Refraction will be showing off REV-1 robot at CES in the Westgate Smart CitiesPavilion with Livox (Booth 833), January 7-10.

This conversation has been edited and condensed for clarity.

Martine Paris



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