Dive Brief:

• Uber has entered into a 10-year partnership with Nuro, an autonomous vehicle (AV) company, to offer food deliveries in Houston and Mountain View, California, the companies announced Thursday.
• The collaboration will begin this fall, and Uber and Nuro plan to scale the service to the greater Bay Area. 
• Earlier this year, Uber began autonomous delivery pilots in Southern California with Motional and Serve Robotics.

Dive Insight:

Uber expects autonomous vehicles to be “an increasingly important part of the transportation ecosystem and therefore Uber’s business over time,” the company wrote in an email to sister publication Restaurant Dive. Instead of building its own AVs, Uber decided to bring outside AV fleets into its network, which includes delivery, ridesharing and freight.  As the company builds trust with consumers, merchants, couriers and policymakers around AVs, Uber expects to expand these tests to other parts of Uber’s business. 

Autonomous delivery could help boost delivery capacity, especially as Uber Eats expands further into grocery, retail and convenience. Uber Eats grew 25% in the U.S. during the second quarter, CEO Dara Khosrowshahi said during the company’s August earnings call. 

Unlike small sidewalk robots, Nuro’s vehicles can navigate city streets, and delivery times are similar to standard Uber Eats times, the company said. Motional, which Uber is also teaming with for an AV pilot, can typically complete deliveries in an average of 30 minutes. 

Merchants interested in participating in the Nuro pilot can reach out to their account manager if they currently partner with Uber Eats. There aren’t any additional fees for restaurants when they partner with AVs, the company said. 

Customers placing orders in markets with these pilots will see a prompt on Uber Eats that says “Autonomous vehicles may deliver your order,” and are given the opportunity to opt-out if they prefer a courier delivery. Those that participate in the program will receive notifications that they have been matched with an AV when their order is picked up from a restaurant. Once the vehicle arrives, the customer will receive an in-app notification to use their phones to unlock the vehicle. If the customer added a tip, they will receive a refund of the tip amount. 

Nuro was the first AV company to achieve fully autonomous vehicle operations in Arizona, California and Texas, which gives it more operational experience than many newer bots just hitting the road. Nuro has also been expanding its partnerships with various operators and grocers, including Domino’s and Kroger. Chipotle also previously invested in Nuro.