Domino’s and Nuro will be testing unmanned pizza delivery with the R2.
Dominos.
Domino’s already knows that a certain slice of its customer base is going to enjoy dealing with driverless delivery vehicles, from tests that it conducted with a Ford Fusion autonomous sedan last year that was monitored by a human passenger. But now the tech-forward, No. 1 pizza maker plans to advance the proposition by testing a Nuro autonomous vehicle that eliminates the passenger space altogether and concentrates on what these Domino’s customers want: getting their food as quickly as possible without the friction of dealing with a human being.
While the Ann Arbor, Mich.-based company was an early experimenter with self-driving vehicles because of the importance of delivery to its business model, the tests may be taking on more urgency these days because it turns out that delivery has become something of a chink in the armor for Domino’s. The company used online ordering and other digital technologies to finally surpass Pizza Hut in sales in 2018. But just very recently, the popularity of third-party food-delivery services such as Uber Eats has helped Pizza Hut and other fast feeders to check Domino’s — while Domino’s sticks with its strategy of performing all of its own deliveries and disdaining third parties.
Nuro, the self-driving-delivery startup founded by a pair of Google veterans in 2016, will begin testing its R2 model with Domino’s to autonomously deliver pizza and other fare out of one Domino’s store in the Houston area. The R2 is about half the size of a typical sedan and designed specifically for its appointed task, without space for a human and with a top speed of 25 mph. Kroger has been experimenting with Nuro to move groceries in Houston and in Scottsdale, Arizona. Customers enter a code to obtain their order from the Nuro.
“Longer term, the overall cost of delivery in a vehicle like this is going to be less than with a passenger vehicle,” Kelly Garcia, chief technology officer of Domino’s, told me. “We just didn’t need the complexity of what you see in a passenger vehicle to execute the delivery of five pounds of food. The other attractive piece is that, because [the Nuro] is limited to 25 miles per hour, it has more flexibility in what it can do and where it can deliver, right now, compared with some of the regulatory [complications] of dealing with driverless passenger vehicles at this point.”
R2 will be allowed to navigate within apartment complexes, for example. Much narrower than a car, it can pull over to the side of a street and let faster, conventional traffic pass it by. “We’re going to start with one store,” Garcia said, “but our plan is, as we’re successful, to continue to scale as fast as regulation and production will allow.”
The company’s testing and research already has persuaded Domino’s executives that driverless delivery offers a certain allure for many customers. “For one thing,” Garcia said, “there’s the value proposition of not having to tip. Also, for some types of transactions, people just don’t feel like dealing with a human — they’d rather just run out to the car, put in their PIN and get their pizza. So beyond the novelty, in these things you start to see some consumer value to it.”
Areas to work on include figuring out how practical driverless vehicles that only go to the curbside would be in high-rise apartment buildings. “Not everyone wants to come down from their 30th-story apartment,” Garcia said. “Or are they even willing to walk around the block if they live in a single-family home? The further you make people walk, the less likely they are to adopt. So this helps inform autonomous-vehicle users where we might need to set up stop points, or do we have to do [delivery points] that seem more continuous? With the restrictions on the ride-hailing business, it’s already not easy to stop and double park.”
Also, Domino’s is finding that newly available GPS tracking can help fine-tune the self-driven-delivery experience by “communicating to customers exactly when we’ll be there. That’s important for human delivery and also for maximizing utilization of an expensive asset like an autonomous vehicle.”
Domino’s also just announced a partnership with Rad Power Bikes, a Seattle-based electric-bike startup, to provide Domino’s franchise owners with e-bikes to replace vehicle deliveries. Franchisees can purchase a custom-outfitted e-bike for up to $1,400. The chain and franchisees in Houston, Miami and New York City experimented with e-bike deliveries earlier this year and found they could cut delivery times by navigating urban congestion and through ease of parking.
“We’ve also been using e-bikes internationally for some time,” Garcia said. “It’s more of a service play than a cost play. If you’re going in a car to some urban areas, a delivery a half-mile or mile away could take you 15 minutes, whereas you’re really cutting the time on a bike. It’s an efficient method in those types of areas. And it could help us tap into the labor force that may not qualify as a vehicle driver, or a younger population that has decided not to get their driver’s licenses yet.”
However, Domino’s has begun downplaying the feasibility of another new delivery method that has gotten tech geeks and others sort of excited: drones. Over the last few years, company affiliates in the United Kingdom and New Zealand A few years ago, the company’s New Zealand affiliate experimented with delivery drones, but Garcia seemed to doubt their future with Domino’s.
“You look at their ability to movd weight and to retain heat from point A to point B, and they’re not nearly as efficient for us as something like the Nuro robot,” he said. “Plus, the regulations for drones are going to be even tougher, when you look at something that’s going to be flying around.”
