CEO of Serve Robotics, Ali Kashani, joins Yahoo Finance to talk about the goal of replacing 5% of food delivery with robots.

– So one thing we’ve learned during the pandemic is that not only have traditional businesses had to adapt, but the whole concept of delivery, whether it be food, retail delivery, it is adapting, and technology is leading the way. We want to bring back into the stream, Ali Kashani, Serve Robotics CEO and former head of Postmates X at Uber, it’s good to have you back. In fact, the last time we talked about this issue, the goal was to replace I think it was 5% of food delivery with the robots. And let’s just face the facts, your robots are so darn cute, those little bots that you’re testing. When is this really going to take place? Because many of us in New York City are tired of dodging the bicyclists who are going to run us over when they run the red lights.

– Thanks for having me. Yes, I think next year is going to be a big year for this effort. We are going to see our economy commercialized for the first time. With these robots rolling out in a few major cities, I think in the next two or three years you are going to see them in every major city in the country, actually.

– Ali, this is Emily here. Thank you so much for joining us. I’m wondering, how high is the barrier to entry in this space? Because it seems like given the labor shortages we’ve seen throughout the year, a lot of companies would want to get into automating their deliveries in some form.

– Absolutely. There is a number of problems you have to solve. We’ve been very lucky that we started over 4 and 1/2 years ago. You have to develop your own hardware, because a vehicle for sidewalk delivery doesn’t exist. You can’t just buy it off the shelf. And you have to develop autonomy, which still is a challenging piece of technology to make. And we’ve been working on this for about 4 and 1/2 years now. So it’s kind of very fortunate timing for us because we can now bring it to market at scale, the work that we’ve been doing for so many years.

– I think the way you described it in another interview was, we’ve spent the last 30 years delivering two pound burritos in two ton cars, here come the robots. What kind of capital though, do you need? I know you had said to us in the commercial break, you’ve just finished another fundraising round, to get these things on the road? How much more do you need to get that 50 state saturation? Is that a metric you can share with us?

– You know, there is a couple of ways to think about this. So comparing self-driving on a sidewalk with the roads I would say the problem is about to orders of magnitude easier. Therefore, it requires to order of magnitude less capital. And we know billions of dollars being invested in the autonomy on the road, so that kind of gives you a sense of scale here. The other thing is that we are actually looking at really good economics right now, compared to any other kind of modality. And we will have more to share about this soon. But the numbers are starting to work. Which means we can actually see a world where we roll out the robots without having to lose a lot of money at the beginning.

– Ali, I’m wondering, what are some of the policy hurdles that need to be cleared for this to really scale in different kinds of locations? Have you been receiving any push back from city officials over safety concerns? Because again, this is an autonomous technology.

– Yeah, there are a number of differences. For one thing, it takes 3,000 robots to have the same kinetic energy of a single car. So the problem is not the same. We are actually seeing a lot of positive momentum with regulators. Something like 16 states have already put frameworks in place for sidewalk robots, and a number of cities have also shown initiative. We’ve actually been able to deploy any city that we’ve approached, and I think there’s a reason for that. The city’s objectives and our objectives are aligned really well. If as a city administrator you’re concerned about traffic, you’re concerned about parking issues, emissions, these are all the problems that we help with by reducing our reliance on cars. So so far it’s been a really good collaboration. And we are very proactive. We try to talk to cities before we do anything and develop a positive relationship to start.

Is the way this is going to all roll out, are we going to learn to trust it with food delivery, and then eventually to retail package delivery? Or will both happen at the same time?

– I think you’re going to see a lot of experimentation in the market. Food delivery makes a lot of sense because we eat three times a day and there is significant labor shortage right now, and the economics are very challenging to work. So it’s a really good starting position. 20 million deliveries happen in the US every single day, just from restaurants. So it just makes a lot of sense as a starting application for building this kind of infrastructure for local delivery. But once you build the infrastructure, there are so many other applications. You can move groceries, you can move alcohol, and pharmacy, and parcels. There’s just an endless list of things that these things can move.

– I just want to say again, your robots cuter than the original R2-D2. And for those of us who old enough, Star Wars IV, V, and VI are not I, II, and III. Come on.