Waymo vehicles will carry packages from UPS stores to a central UPS warehouse.

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Waymo, Alphabet’s self-driving company, is getting into the package-delivery business, the company announced in a Wednesday blog post.
“Our self-driving Chrysler Pacifica minivans will shuttle packages from UPS Stores in the Metro Phoenix area to the UPS Tempe hub,” Chief Operating Officer Tekedra Mawakana wrote. Initially, Waymo will have a safety driver behind the wheel of each vehicle carrying packages.
Importantly, Waymo is not going to start delivering UPS packages directly to customersa job that would require a human delivery person to carry the package to a customer’s front door.
Several startups, including Nuro and Udelv, are building custom delivery vehicles that will be designed for making deliveries directly to customers. These firms have focused on on-demand deliveries of perishable items like pizza and groceriesnot UPS-style package deliveries.
In contrast, Waymo will be carrying packages between UPS facilities, where a UPS employee can handle the loading and unloading steps at each end. Of course, the two companies could eventually expand the partnership to include other types of deliveries.
Waymo has been exploring a range of applications and business models for its self-driving technology. The company has been testing self-driving semi trucks for the last two years. And it has had a variety of partnerships in the Phoenix area. These have included deals with Walmart, AutoNation, and Valley Metro, the agency that runs the Phoenix area’s bus and light rail systems.
At the same time, Waymo has been struggling to scale up its flagship taxi service, Waymo One. The service was supposed to launch as a public, driverless service by the end of 2018. But Waymo missed that deadline, launching a service with safety drivers that was initially only open to a handful of people. Waymo recently told customers to get ready for fully driverless rides, but how many of Waymo’s vehicles are actually operating in driverless mode remains unclear.
That matters because none of Waymo’s services are likely to be profitable until Waymo can operate at a large scale without safety drivers. Competitors like Uber are already offering rides and delivering food using human driversand their cars aren’t full of expensive self-driving equipment. So Waymo won’t be price-competitive as long as there are human beings behind the wheels of its cars.