Market Overview

Doordash Acquires Scotty Labs, Pushes Towards Automated Deliveries

Doordash Acquires Scotty Labs, Pushes Towards Automated Deliveries

Doordash CEO Tony XU 

Doordash's newest acquisition hints at its steer away from human drivers. 

Scotty Labs is a three-year-old Silicon Valley company whose core value states "autonomy and remote assistance will be the future of logistics." On August 20th, CEO Tobenna Arodiogbu announced the company's plan to join forces with Doordash and build "something magical together." 

Ironically, back in July, the New York Times published "My Frantic Life as a Cab Dodging, Tip Chasing Food App Delivery Man" – an exposé of the food delivery business, an industry projected to be worth $3 trillion by 2030

"I learned up close how the high-tech era of on-demand everything is transforming some of the lowest-tech, lowest-status, low-wage occupations – creating both new opportunities and new forms of exploitation," Andy Newman wrote. 

The article also exposed Doordash's tipping practice, which doesn't benefit the worker at all. Days after Newman's article was published, Doordash's CEO Tony XU tweeted a revocation of the tipping policy and promised that "the new model will ensure that Dashers' earnings will increase by the exact amount a customer tips on every order."

"Dashers" are contract workers who have a high risk of on-the-job injury and no benefits, so keeping their tips would be helpful. And customers might like to know where their tips are going. 

Doordash prides itself on being the first food delivery platform to operate in all 50 states. Only weeks ago, it acquired Caviar from Square in a deal worth $410 million. The exponential growth of the food-delivery business forces restaurants to face the looming reality that customers are growing less interested in the dining-in experience and the historically large square-footage of those restaurants may lessen over time. 

While the news of the Scotty Lab acquisition starves for detail, funds are clearly moving towards automated and remote-controlled technology for food delivery. Scotty Labs has successfully executed both technologies. And back in April, Doordash quietly acquired Lvl5, a tech company that makes maps for autonomous driving. 

With the recent complaints about workers' rights, it makes sense that Doordash, like every other on-demand mobility company, is thinking about efficiency and the cost of human labor.

Image Sourced from Wikimedia Commons

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: acquisition delivery DoorDashM&A News Markets Tech General


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