Last Mile Delivery with Autonomous Vehicles: Fiction or Reality?

Abstract

Autonomous vehicles (AVs) are a disruptive technology of the 21-st century that are beginning the next revolution of the transportation of people and goods. Their presence has a particular impact on the future directions of development of E-commerce. The number of online orders is in a steep incline, and so is the necessity to deliver goods to the customer in an efficient and environmental friendly way. Using autonomous drones, pods and vans for delivery of goods has already become reality. But, what is the state of the art of the companies offering these services and how do people feel about it? The aim of this paper is to make an overview of the business models of the companies developing AVs for Last Mile Delivery (LMD) of goods and to find out what is the attitudes of the online customers towards using AVs for delivery of their goods.

Full text

Last Mile Delivery with Autonomous Vehicles:
Fiction or Reality?
Sasho Gramatikov
Faculty of Comp. Sci & Eng.
Ss. Cyril and Methodius University
Skopje, North Macedonia
sasho.gramatikov@finki.ukim.mk
Ivan Kitanovski
Faculty of Comp. Sci & Eng.
Ss. Cyril and Methodius University
Skopje, North Macedonia
ivan.kitanovski@finki.ukim.mk
Igor Mishkovski
Faculty of Comp. Sci & Eng.
Ss. Cyril and Methodius University
Skopje, North Macedonia
igor.mishkovski@finki.ukim.mk
Milos Jovanovik
Faculty of Comp. Sci & Eng.
Ss. Cyril and Methodius University
Skopje, North Macedonia
milos.jovanovik@finki.ukim.mk
Abstract—Autonomous vehicles (AVs) are a disruptive technol-
ogy of the 21-st century that are beginning the next revolution
of the transportation of people and goods. Their presence has a
particular impact on the future directions of development of E-
commerce. The number of online orders is in a steep incline, and
so is the necessity to deliver goods to the customer in an efficient
and environmental friendly way. Using autonomous drones, pods
and vans for delivery of goods has already become reality [1].
But, what is the state of the art of the companies offering these
services and how do people feel about it? The aim of this paper
is to make an overview of the business models of the companies
developing AVs for Last Mile Delivery (LMD) of goods and to
find out what is the attitudes of the online customers towards
using AVs for delivery of their goods.
Index Terms—Autonomous vehicles, Last mile delivery, Busi-
ness Model, Survey, Public opinion
I. INTRODUCTION
With the growth of the E-commerce as a common global
practice for shopping, the number of on-line orders has con-
siderably increased, as have the expectations of the customers
for faster last mile delivery. In the pursue of solution for
satisfaction of these expectation and in the struggle for greater
market share, the leading companies have dedicated a consid-
erate effort and money to find more innovative and efficient
ways of last mile delivery of packages [2]. One such solution is
delivery of packets to customers using Autonomous Vehicles
(AVs) [3]. These vehicles have become a reality due to the
advances of electric vehicles technology, computer vision and
machine learning.
We can already witness drones in the skies delivering
packets above the crowded cities [4] or autonomous pods
wandering around the pavements of the cities carrying worm
meals from the restaurants. Although many such vehicles are
in a pilot phase for becoming approved and secure delivery
solution, there are already companies that launched AVs that
offer commercial delivery services. Since the LMD with AVs
is in pilot phase only in few developed countries, one of the
goals of this papers is to identify these companies and give a
general picture of their business model.
Although these ambitious ideas for LMD are not far from
becoming common practice, there is still public skepticism for
their full incorporation regarding the safety concerns imposed
by letting driver-less drones, pods or vans make decision on
their own in busy roads and crossroads or crowded pedestrian
areas. Other concerns that affect customers are the security of
the goods delivered, the privacy of the customers. In order to
sense the public opinion for acceptance of AV in LMD, we
conducted a survey that compares the e-commerce customers
preference for delivery of their orders via AVs as opposed to
traditional delivery.
The rest of the paper is organized as follows. In section
two we present an overview of the business models which
companies use for AVs in LWD. The survey to gauge the
public opinion on AVs in LWD is presented in section three,
along with the results. A discussion about the result is laid out
in section four. Finally, we present the concluding results in
section five.
II. LA ST MI LE DE LI VERY BUSINESS MODELS
EVALUATI ON
In order to evaluate the current state of AVs for LMD,
we searched for companies that have autonomous delivery
of goods as their primary revenue model. As a source, we
used the publicly available data on the Internet, such as
the official web sites of the companies, news articles and
blogs. The companies included in the analysis were classified
based on whether they use drones (Figure 1) or ground based
vehicles such as pods and vans (Figure 2). We considered
Amazon Prime Air Delivery [5], Wing [6], Tactical Robotics
[7] and Drone Delivery Canada [8] in the first group, and
Starship Technologies [9], Marble [10], Robby Technologies
[11], Nuro-R1 [12], Dispatch Carry [13] and EZ-Pro [14] in
the second group. The aggregated results for the properties of
the business model canvas are shown in Table I.

Fig. 1. Drone-based delivery: Amazon Prime Air
Fig. 2. Ground-based delivery: Robby Technologies
TABLE I
OVE RVIE W OF BUSINESS MOD EL PRO PERTIE S OF LMD COMPANIES
Ground-based de-
livery
Drone-based de-
livery
Year founded 2014-2018 2012-2018
Type of company Start up Existing company
Country USA, England,
Germany, France
USA, Canada, Is-
rael
Radius up to 10 km up to 150 km
Freight max.
weight
/ 1.5 - 500kg
Type of packages Groceries, food,
packets
Packets, cargo
Security Yes Yes
Fully implemented Yes Yes
Assistance Mostly no No
Model B2B B2B and B2C
Revenue model Retailer paid Consumer and re-
tailer paid
Funding $55M-$1B /
Cost / /
According to the table results, the ground-based delivery
business has be founded in the past few years by start-
up companies with considerate investments. Their business
model is B2B, i.e., they offer services to retailers that need
delivery of goods to their costumers, mostly groceries or meals
from local restaurants. Their vehicles cover ranges of up to
10km and, with a few exceptions, deliver the goods with no
assistance. The recipient is usually notified for the arrival of
the vehicle, and upon insertion of a security pin, the packet
can be withdrawn from the vehicle. In the case of an assisted
vehicle, the human operator only delivers the package from the
vehicle to the door of the customers. The companies charge
the retailers for the delivery service. On the other hand, the
drone-based delivery business is a few years ”older” and has
been generally founded by wealthy and well known companies
(hence the lack of funding data) with the aim to cover larger
regions of urban areas and to deliver heavier packets, which, in
some cases, can be classified as cargo. In their business model,
besides offering service to the retailers, they also offer delivery
service directly to the customers. Therefore, the companies can
also directly charge the customer for delivery of the goods.
Both groups provide mobile applications, so the the customers
can get notified and track where their delivery are in real-
time. The vehicles are completely autonomous, but constantly
monitored by ground operators who can take the control in
critical situations. All the companies are founded in developed
countries and they all have full implementation in the current
year or expect to go commercially next year.
III. SURVEY
In order to evaluate the preference of people to use AV
delivery as opposed to the traditional delivery, we conducted
a short online survey [15], [16]. The survey consisted of dif-
ferent groups of questions which aim to profile the customers
according to their socio-demographic characteristics and their
attitudes toward AV last mile delivery. The structure of the
survey is depicted on Figure 3.
Fig. 3. Survey structure
The survey was conducted in March 2019 within a period
of 2 days. The majority of the participants were attendants
of a Training school related to the autonomous connected
transport. The questionnaire was completed by 33 participants
form 12 countries with average age of 38.1 year. Most of
the participants had first or second degree of education. The
participants were gender-balanced.

The first group of questions profiles the participants as
online-shoppers. Figure 4 shows the frequency of using de-
livery services when shopping on-line different types of prod-
ucts. From the figure we can see that when purchasing big
size products or food from the supermarket the participants
seldom use delivery, or use it only a few times a year. The
frequency is slightly higher for delivery of small sized products
(books, electronics, toys, etc), clothes and shoes, which ranges
between never and once a week. What is most frequently
delivered to the users is food from a restaurant. The results
show that the customers still do not receive their everyday
shopping items directly in their homes or offices.
0
5
10
15
20
25
Samll size
products
Big size
products
Clothes or
shoes
Food from a
supermarket
Food from a
restaurant
Frequency
Never
A few times per yea r
A few times per month
Once a week
2-3 times a week
Every day
Fig. 4. Frequency of using delivery services for online buying of different
types of products
0
2
4
6
8
10
12
14
16
Quality/Price
ratio
Local
products
Low delivery
time
Customer
care
Green
production
Green
logistics
Green
packaging
Frequency
1 (Not at all important) 234567 (Very important)
Fig. 5. Perception of importance when buying a product online
Figure 5 shows the perception of importance when buying a
product on-line. The most important aspect of on-line shopping
for the participants is the quality/price ratio of the product, the
delivery time and the customer care, which means that they
0
2
4
6
8
10
12
14
16
18
I know more than
others on latest
new products
I often purchase
new technology
products
I am excited by the
possibilities offered
by new
technologies
I have little to no
interest in new
technologies
Freque ncy
1 (Completely agree) 234567 (Completely disagree)
Fig. 6. Customers’ attitude towards new technologies and products
want to get cheap products with good quality in a very short
time, and at the same time, to be sure that they can get the best
of what they payed for. The participants have shared opinion
regarding the locality of the products: some of them prefer
that the products are local so that they can be delivered faster,
while some give no importance to the origin of the product,
since what matters most is its price. Most of the participants
also give some importance to the environmental impact of e-
commerce, from the perspective of production, packaging and
logistics.
Since delivery with AVs by itself is a new technology, the
participants were asked questions that reveal their attitudes
towards new products and technologies. From the results
presented in Figure 6, we can conclude that the most of
the participants have big interest in new technology and are
excited by the possibilities they offer. However, they have
different levels of knowledge related to the new technologies.
When asked about their perceptions towards future deliver-
ies with AV, as Figure 7 shows, the majority of participants
would greatly value fast delivery with AVs, although there
are some that do not give much credit to the whole idea.
Nevertheless, they mostly disagree that the delivery with AVs
will cause them to lose control over their personal security.
The fact that the AVs are unattended when moving in the open
space leaves many doubts about the safety of the packets on
their way to the customers, which can be seen by the responses
of half of the participants. On the other hand, as shown in
the analysis of the business models of the LMD companies,
the packets are secured with a unique code shared with each
customer separately, so that only the customer, can open the
case upon arrival. Therefore, another half of the participants
do not fear that the packet may be stolen. Similar distribution
of responses can be observed on their opinion about the data
privacy with AVs deliveries. Despite of these concerns, a vast
majority of the online customers would use AVs to receive
their orders in the future.

0
2
4
6
8
10
12
14
16
I would greatly
value fast
delivery with
an AV
AVs delivery
will cause me
to lose control
over my
personal
security
The package
the AVs carry
might be stolen
or damaged
I would use
AVs to receive
my orders
I am concerned
about the data
privacy with
AVs deliveries
Frequency
1 (Completely disagree) 234567 (Completely agree)
Fig. 7. Perceptions towards Future Deliveries with AV
0
2
4
6
8
10
12
14
I believe that
deliveries with AVs
will reduce total
Greenhouse Gas
(GHG) emissions
I believe that a fully
automated transport
system would be more
environmentally
friendly that the
current one
Deliveries with AVs
will make my life
easier since I will no
longer need to care
about picking-up my
products at the store
I trust the AV to drive
my order safely to me
Frequency
1 (Completely agree) 234567 (Completely disagree)
Fig. 8. Perceptions towards Future Deliveries with AV and the environment
The positive attitude of the participants towards the AVs
is also confirmed in the results shown in Figure 8. The
AVs are highly trusted to safely deliver the orders to the
customers. Moreover, they believe that this mode of delivery
will considerably make their life easier when shopping is
concerned, since they do not have to leave the commodity
of their homes in order to pick-up their products.
In the survey, the participants were also asked about the
impact of the AV delivery on the environment. In Figure 8, we
can see that they mostly believe that the automated transport
system would be more environmentally friendly than the
traditional delivery system. However, not all the participants
believe in such a scenario. The situation is also quite similar in
the responses regarding their believes that the AVs will reduce
the greenhouse gas emissions. One reason for the skepticism,
despite the fact that the AVs are electrically powered, is that
they do not see that the growth of the autonomous vehicles
will come to a scale that will dominate over the traditional
transport, so that AV-based delivery can have any global effect.
IV. DISCUSSION
The results show that the participants generally keep up
with the new technologies and are eager to use the latest tech-
products. However, for certain products, they still do not use
delivery services for on-line purchase as often as it would be
expected for a future where most of the purchases will be
made on-line. As the participants have never had experience
with AV delivery, a certain part of them are unsure about using
AVs in their future deliveries, fearing that their packet will be
stolen, or that they would have issues with their privacy. The
lack of AVs delivery may be a good reason for such attitude,
since the customers are not acquainted with the efforts that the
companies make to provide the best of the delivery service.
One should also note that the average age of the participants is
rather high, and hence, different results may be expected from
younger generations which have grown with high technologies
from their earliest ages. It should also be mentioned that the
survey was conducted for only a short period of time and
distributed only to a small group of people and their friends
with same level of education, which resulted in a relatively
small number of participants which is not high enough to
represent the global opinion of the general public.
V. CONCLUSION
The AVs are already at our doorways. The companies are
intensively introducing them in the delivery services, comply-
ing with the increasing demands of innovative and efficient
delivery for the E-commerce. From our on-line company
search, we can conclude that the companies are keeping up
with these demands by offering drone-based and ground-based
delivery with AVs. They offer many features such as security,
safety, speed, environment awareness and, most importantly
convenience, which make them a promising substitution to
the tradition transportation for delivery. The same conclusion
can be obtained from the survey that we conducted on a small
group of e-commerce customers. Most of the participants of
our survey accept and strongly believe in the future of the
AVs. They think that AVs will make their life easier without
fearing their own safety or the safety of the goods they order.
They also find the AV delivery more environmental friendly
than the tradition one. However, there is still a minority that
feels doubtful about the AVs and their benefit. Since the most
important aspects for all the participants are good quality/price
products, fast delivery and customer care, and at the same
time, there are participants that are not convinced about the
safety of the products and their privacy, the current and the
future companies dealing with the AV delivery services will
have to consider offering acceptable prices for a fast service,
guaranteeing the safety of the goods, the costumers’ data and
all the participants in the traffic. At this day, the AVs are

still under doubts by many people, just like the traditional
vehicles were less than a century ago. With this in mind, if
we go froward to the future, we may be quite sure that AVs
will conquer the market of global transportation, leading the
modern civilization to next level of progress. .
VI. ACKNOWLEDGMENT
The authors thank the Faculty of computer science and en-
gineering at the Ss. Cyril and Methodius University in Skopje,
under the Flow2OD (“ Generation of universal simulation data
based on real traffic flow data ”) project for financial support.
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