Kroger and Nuro now providing driverless grocery delivery service in Arizona

Though it's often derided as a "toaster on wheels," there aren't many toasters, mobile or otherwise, that have the potential to disrupt the supply chain that the Nuro R1 possesses.

The Silicon Valley startup Nuro was founded by two veterans of Google's self-driving car program, and is staffed by robotics professionals from Uber, Tesla, Apple and General Motors. Instead of manufacturing autonomous vehicles for personal use, the company is focused on building small autonomous vans dedicated to delivering goods ordered online or at local shops.

And now after several months of testing, the R1, Nuro's small, toaster-shaped autonomous van, has officially begun delivering groceries to Kroger customers in Arizona.

Driverless grocery delivery starts in Scottsdale

It was announced in June that Nuro had entered into a partnership with Kroger, America's largest supermarket chain, to "redefine the grocery customer experience for Americans by piloting an on-road, fully autonomous delivery experience."

In August, the two companies officially launched their unmanned grocery delivery pilot program in Scottsdale, Arizona. The initial test run started small, with only a single participating store, which customers could order from online by using the store's website or an app. Users were able to schedule same-day or next-day deliveries, and were charged a $5.95 delivery fee for their orders.
While the R1 was still in development, the pilot program instead used a fleet of Nissan Leaf and Toyota Prius test vehicles equipped with autonomous-driving hardware and human safety drivers sitting behind the wheel in case of an emergency.

In December, Kroger announced that the pilot program had officially reached active implementation.
According to reports, the Nuro R1 travels on mapped out public roads at speeds of 25 miles per hour without the aid of a driver, and comes complete with an array of sensors and cameras that enable autonomy, and a rooftop radar and light detection and ranging sensor. The vehicle has also been designed to carry up to 20 grocery bags, as well as items that are not necessarily food and drink.
There is still a $5.95 charge to transport local deliveries, with no minimum order requirement for same- or next-day deliveries. Customers use a smartphone app to access the vehicle's delivery compartments and collect their order upon arrival.

For now, service remains isolated to only Scottsdale. Arizona has been a breeding ground for autonomous vehicle testing, as the state has pursued looser regulations on self-driving cars in order to attract such businesses.

There are also reports that the vehicle does not travel in inclimate weather, raising questions about how viable the technology would prove in environments with more volatile climates and more intense traffic situations than are found in the sunny suburb of Scottsdale.

What it portends for the supply chain

In its present form, the Nuro R1 provides a convenience for grocery shoppers, while threatening the niche business models of human-operated grocery delivery services such as AmazonFresh, Google Express and Instacart Express.

Yet as the R1 and similar autonomous vehicles begin to deliver other types of products, larger entities such as FedEx, UPS and the United States Postal Service could begin to lose market share. Self-driving cars and trucks are also poised to revolutionize freight movement, disrupting the major supply chain link and likely displacing many of the workers participating in it.

As Supply Chain Dive notes, the regulatory environment for autonomous vehicles is still murky, making it difficult to predict when and to what degree such technology will be able to have a profound impact on industry.

Still, with Kroger using the Nuro R1 to make driverless grocery deliveries, and Walmart conducting similar autonomous tests with Waymo and Ford Motor Company, there are clear signs of a tectonic shift in the supply chain on the horizon.