It is no secret that Amazon purchased Zoox last Friday for 1.2 billion dollars. Amazon plans on being a force in the autonomous hailing and autonomous ride-sharing market. This is not a small move for Amazon and here’s why.
This market is going to blow up over the next few years and this move is nothing short of huge for Amazon. They already have a platform that is one of the biggest market places in the world and the cross promotional opportunities are endless.
Amazon intends to help Zoox “vision of autonomous ride-hailing to reality”. Zoox will also continue to operate under its own name but under Amazon. Autonomous delivery not a factor for the for next little while. The sheer logistical challenges of dropping off the package itself makes this so. This acquisition is a great introduction to a potentially massive market. This will also open up the idea of home grocery delivery through Amazon.
There will be some leg work for Amazon in the coming future however. They will need to invest between $1 – $2 billion dollars to help complete the development of the autonomous vehicle and technology. Amazon will also need to shell out several more billions in order to build a proper fleet of vehicles to help support it.
Zoox has always gone to phase two of autonomous vehicles, which are vehicles designed for autonomous use rather than having them retrofit. Their latest build actually have the seats facing each other and no steering wheel or pedals. Their latest version the VH5 has the ability to go full speed in forwards and reverse.
Acquiring Zoox puts Amazon right in the middle of their development cycle. This strategy bypasses the crazy start up costs of starting from square 1. This product by the time it reaches maturity could have a potential value of $30 – $40 billion dollars. This is a great value proposition for Amazon and catapults them right in the middle of an industry that has many potential benefits to them.