Walmart, Ford, and Argo are launching a driverless delivery service in some U.S. cities

Walmart Inc. is teaming up with Ford Motor and self-driving startup Argo AI to launch a driverless delivery service in three U.S. cities.

Testing will begin in three cities later this year—Miami; Austin, Texas; and Washington, Argo said Wednesday in a statement. Ford is providing Escape hybrids outfitted with Argo’s self-driving technology to deliver groceries and other merchandise in what’s billed as Walmart’s first multicity self-driving service.

Walmart, the world’s largest retailer and a logistics leader, has aggressively pursued the possibility of delivering its goods in robot rides. It also is testing driverless delivery with General Motors Co.’s Cruise LLC, Alphabet Inc.’s Waymo, autonomous delivery startup Nuro, and self-driving delivery company Gatik. With a boom in online shopping driving demand, analysts say autonomous delivery could become a $1 trillion business.

“This collaboration will further our mission to get products to the homes of our customers with unparalleled speed and ease,” Tom Ward, Walmart’s U.S. senior vice president of last mile delivery, said in a statement. It “will continue to pave the way for autonomous delivery.”

Offering delivery in three densely populated U.S. cities is what distinguishes the Argo-Ford partnership from Walmart’s other self-driving pilot programs, said Cynthia Kwon, Argo’s vice president of strategy.

“For a company like Walmart, which has locations everywhere in the U.S., it’s a very interesting and compelling proposition for us to be able to tell them, ‘Hey, we can expand with your business and we can do it quickly in a very scalable way,’” Kwon said in an interview. “I don’t think they’ve seen that from others.”

Ford rose 1% to $13 at 10:53 a.m. in New York and is up almost 48% this year. Walmart was little changed at $144.28 at 10:55 a.m. in New York. The retailer’s shares are up less than 1% this year.

The initial test run will begin with one Walmart store per city and deliver in a limited geographic region around each location, Kwon said. Shoppers will order groceries or other items and then will have the option to have them delivered autonomously, as long as someone is home to receive the merchandise. There will be no extra charge for driverless delivery, Kwon said.

Customer interaction

“We will have to make sure someone’s home, and we will be experimenting with how the interaction is when someone goes to pick up the groceries or the package from the car,” Kwon said. “It should be a seamless and enjoyable experience.”

For Ford, the partnership with Walmart is separate from a pilot program it tested with the retailer three years ago that has since concluded.

“Pairing Walmart’s retail and e-commerce leadership with Argo and Ford’s self-driving operations across these multiple cities marks a significant step toward scaling a commercial goods delivery service,” Scott Griffith, chief of the automaker’s autonomous vehicles and mobility businesses, said in the statement.

Ford and Argo also have struck a deal with Lyft to deploy self-driving ride hailing in Miami and Austin later this year.

Argo is testing self-driving vehicles in six U.S. cities in its alliance with Ford. And through its partnership with Volkswagen AG, Argo has begun testing autonomous vehicles in Munich and Hamburg, Germany.

As Argo ramps up toward plans for full commercialization of its driverless technology, it also is preparing to go public this year or next. Argo was founded in 2016 by Bryan Salesky, who helped start the Google self-driving car project that became Waymo, and Peter Rander, who previously led Uber Technologies Inc.’s autonomous unit.