The market for autonomous last-mile delivery services is growing fast due to the twin trends of rising demand for faster delivery of packages and recent technological advancements in delivery vehicles, according to a new analyst report.

As proof of the latter point, e-commerce powerhouse amazon.com Inc. said Friday it had acquired the autonomous ride-hailing vehicle developer Zoox for an undisclosed sum.

However, the autonomous vehicle sector is also hampered by two complicating factors: a lack of supporting infrastructure for the operation of autonomous delivery services and strict government regulations, according to the report from Portland, Oregon-based Allied Market Research.

Taken together, those opposing trends could present a challenging environment for Amazon to adopt Zoox’ technology to its needs. While Amazon’s robotics arm is primarily known for the autonomous mobile robots (AMRs) scooting around its cavernous warehouses, Foster City, California-based Zoox is focused on outdoor ride-hailing for passengers. 

That application is a different sector than Amazon’s core business of providing retail, fulfillment, and parcel delivery for its online marketplace, but the firm’s autonomous technology is designed to tackle many of the same challenges. A 31-minute video posted by the firm shows two of Zoox’ top engineers commenting on their vehicles’ capabilities during a fully autonomous drive through Las Vegas. The drive features a display of the car’s “point of view” as it navigates complex scenarios “synonymous with” dense urban environments, such as airport pickup and drop-off zones, busy 6-lane traffic, hotel pickup zones, thousands of pedestrians, and construction zones.

"Since Zoox's inception six years ago, we have been singularly focused on our ground-up approach to autonomous mobility," Zoox co-founder and CTO Jesse Levinson said in a release. "Amazon's support will markedly accelerate our path to delivering safe, clean, and enjoyable transportation to the world.” Both Levinson and Zoox CEO Aicha Evans will continue to lead the team after the deal is complete, Amazon said.

According to Allied Market Research, the overall market for global autonomous last-mile delivery is expected to reach $11.12 billion in 2021 and $75.64 billion by 2030, growing at a compound annual growth rate (CAGR) of 23.7% from 2021 to 2030. The firm lists Amazon as being one of the major market players poised to benefit from that growth, alongside other companies such as: Flirtey, Matternet, Starship Technologies, Airbus, JD.com, Marble, Savioke, Flytrex, and Drone Delivery Canada.

We are delighted to announce that Zoox is teaming up with @amazon. We have made great strides in creating autonomous mobility from the ground up, and are excited to continue working with our exceptionally talented team to realize that vision. https://t.co/TdQKaebKW7

— Zoox (@zoox) June 26, 2020