Interesting stuff here about the structure of BrightDrop
Let’s talk about BrightDrop itself and its structure for a second. How is BrightDrop structured? You don’t need a bunch of battery engineers, right? GM has that platform.
Probably the simplest way to think about it is that we are running like a tech company. We have a hardware business, a software business, and a vehicle business.
For the vehicle side of the business, the best analogy is that GM sort of works like a contract manufacturer for BrightDrop. We say, “Look, this is what we need from the vehicle and what we need to be able to do,” and GM does that. For everything else, we’re building software that runs in the vehicle, desktop software, mobile software, and e-carts for different verticals. All of that is happening at BrightDrop, so we do actually need battery engineering and that sort of stuff for the e-carts.
I guess the simplest way to put it is that we’re structured very much like a typical tech company. We have product management, design, and engineering for both hardware and software. We have a whole sales organization where we go to market and engage with customers, to help not just sell the products, but to also really think about how we can partner with them to solve problems. It’s very unique.
In some ways this is an area that really sets us apart. There are a lot of other companies that are bringing to market electric vehicles for the delivery space. The reason they’re doing that is because it’s a massive space. E-commerce is a $5 trillion market, and it’s going to be growing to $7 trillion by 2025. There’s a big opportunity there, so there are a lot of people saying, “Hey, we’ll build a van to help these companies deliver stuff.” We’re not thinking about a van as a standalone product. We’re thinking about an ecosystem of products. We’re really thinking holistically about the challenges that these delivery companies are facing.
Let me explain what those things are. As you can imagine, there have been companies delivering stuff to our door for a long time, but the pace of that has been growing dramatically. With the rise of Amazon and the rise of e-commerce, we’re seeing just massive double-digit growth year after year after year.
At the same time, we’re seeing expectations from consumers of, “I want things to arrive faster and faster.” First, it was like, “Okay, if I can get it in a week or 10 days, that’s great,” and then Amazon came out with next-day delivery. Now there’s a whole push for, “Can I get it delivered to my door in an hour or two?” That’s really, really challenging. It requires rethinking the entire system. How do you stage goods closer to people? How do I organize and track where goods are and predict what goods are going to be needed in certain areas? There’s a lot of complexity there.
In addition to that, to keep pace with this growth, companies have been saying, “Okay, let’s just throw more bodies and more trucks at the problem.” The challenge we’re running into now is that the infrastructure of our cities is fixed. You can’t make the streets wider, so as you put more and more delivery vans into urban areas, you start to see massive challenges with congestion. We’ve all seen this. These delivery vans can’t find a parking space, and a lot of times they’re double-parked and blocking a lane of traffic. This happens at multiple points in a city simultaneously, which is creating logjams and making people late to work or late to pick their kids up after school.
It’s also dangerous. A lot of times, couriers are having to step out into traffic to get out of these vans and bicyclists are trying to get around the van that’s sitting in the bike lane. The current system doesn’t scale. We’ve reached the maximum scale.
What we’re trying to do with BrightDrop is really say, “Let’s take a step back and look at this problem holistically. How can we reimagine how these goods get there?” Things like the Trace e-cart that we built have been tested with FedEx in multiple cities, and we’re testing it with a bunch of other partners as well. FedEx was able to deliver 25 percent more packages per day using the Trace than without.
Let me describe the Trace for your listeners. Imagine essentially a big box or a locker on wheels with electric propulsion. It can carry 250 pounds of packages. With the electric propulsion, it feels effortless. Instead of dragging along this dolly with things strapped onto it, it’s effortless, it’s easy to maneuver, and it fits in an elevator. When a truck pulls up, instead of doing five trips back and forth to the van to serve a single high-rise building, you can do the entire thing in one go.
You can also start to reimagine how you do it. Do you create a central drop-off point or a micro-hub where you can have trucks drop these things off and give them to bike couriers or foot couriers and fan those things out across the city? To do that, of course, you need a lot of software. Ultimately, delivery is like a massive optimization problem, where you have tons of packages that need to get to tons of people in tons of different places, and you need to figure out what’s the most efficient route. A lot of the software we’re designing is helping to reimagine how you do this at the lowest cost, with the lowest possible carbon emissions, and at the highest speed.