Serve Robotics’ Delivery Reliability Reached 99.9% per 1,000 Orders

This is an English adaptation of a FoodBud historical article originally published on January 7, 2024.

In mid-2023, delivery-robot startup Serve Robotics said it had secured $30 million in financing led by investors including Uber and Nvidia, with plans to go public through a reverse merger.

The company later said it had raised more than $56 million in total. Existing investors including Uber, Nvidia and Wavemaker Partners led the round, with new investors Mark Tompkins and Republic Deal Room also participating.

Serve Robotics was founded in 2017 as the robotics unit of Postmates, which Uber acquired in 2020. The company focuses on zero-emission robotic delivery in public spaces, starting with food delivery. It became independent in 2021 and built commercial partnerships including Piestro, Uber Eats and Pizza Hut.

Through a reverse merger with Patricia Acquisition Corp., Serve Robotics became Patricia’s wholly owned subsidiary. Patricia was renamed Serve Robotics Inc. and said it would continue Serve Robotics’ business.

What Operators Should Note

FoodBud reviewed Serve Robotics’ 8-K filing and highlighted several points relevant to foodservice and delivery operators:

1. Serve Robotics operated a fleet of more than 100 delivery robots and planned to continue scaling after financing. Its strategic investors included Nvidia, Uber, 7-Eleven and Delivery Hero.

2. Last-mile delivery remained costly and inefficient. Serve Robotics estimated that delivery-worker errors and related factors could add more than $1 to the cost of each delivery. Similar efficiency pressure exists beyond restaurant delivery: Amazon, for example, had introduced a U.S. policy offering consumers a $10 reward for picking up orders at nearby offline stores.

3. Autonomous vehicles, delivery robots and drone delivery could complement one another. Ground delivery robots are better suited to short-distance delivery in dense urban areas, while drones are better suited to longer-distance delivery in lower-density areas.

4. Delivery robots may reduce costs and improve fulfillment efficiency. Serve Robotics also pointed to returns as a use case: instead of waiting days for an ecommerce order, then returning and reordering if the item is unsuitable, a local store could send several shoe styles by robot within an hour; the customer keeps the suitable pair and leaves the others for automated return. Other claimed benefits include traffic safety and delivery-worker safety.

5. Serve Robotics’ design principles were: “Be familiar,” “Be fresh,” “Be deferential” and “Be considerate.” The company said the robot’s appearance was inspired by common sidewalk objects such as strollers and shopping carts. In operation, the robot is intended to respect everyday pedestrian use and defer to people in conflicts.

6. Serve Robotics was still loss-making. In 2022, about 50% of its revenue came from Uber Eats, while roughly 50% came from brand-marketing advertising fees, including ads on robot bodies.

7. Since 2022, Serve Robotics had completed thousands of deliveries for Uber Eats. According to the company’s data, human delivery workers failed to complete five or more orders per 1,000 deliveries, implying 99.5% reliability. Delivery robots reached 99.9% reliability per 1,000 deliveries.

8. Serve Robotics generated $16,000 in revenue in 2022 and $40,000 in the first quarter of 2023. Net losses were $3.94 million and $5.14 million, respectively.

9. Serve Robotics had 12 daily active robots in 2022 and 26 in the first quarter of 2023. In Q1 2023, its robots provided a total of 152 operating service hours per day.

10. Uber held a 16.2% stake in Serve Robotics, while Nvidia held 11%.

China Comparison: Meituan

China’s Meituan has also been exploring drone delivery and delivery robots. It began testing unmanned delivery as early as 2016 and launched multiple delivery robots.

By the end of 2022, after nearly one year of normalized trial operations in Shenzhen, Meituan’s drones had covered more than 8,000 households and completed 30,000 orders for real users. More than 90% of the core components in its urban low-altitude logistics network were developed in-house by Meituan.

By the end of November 2023, Meituan drones had launched 22 routes across eight business districts in cities including Shanghai and Shenzhen, serving 19 residential and office communities, five scenic areas and one hospital. The service had completed more than 210,000 user orders. In 2022, average drone delivery time was about 12 minutes, nearly 150% more efficient than traditional delivery, saving users nearly 30,000 hours of waiting time.

Operator Takeaway

In the long term, automated delivery is likely to keep advancing. In the short term, it is unlikely to fully replace human couriers, but coverage and order volume may gradually increase. The key operating question remains simple: compared with human delivery workers, which model delivers better efficiency at lower cost?

Note: financing, IPO, ownership, operating metrics and forward-looking plans above are historical figures from the 2024 source article.