Partnership with Ryder marks a change in Gatik’s business model, from vehicle ownership to leasing, and includes potential outsourcing of fleet operations, with Gatik focusing more on providing “Autonomous Delivery as a Service” technology to its clients

Autonomous vehicle technology company Gatik — based in Palo Alto, Calif., and Toronto, and best-known in Canada for a multi-year partnership with Loblaw — last week announced a deal with U.S. logistics and transportation giant, Ryder Systems, to establish an autonomous delivery network for B2B short-haul logistics for retail customers in North America. 

Both the geographic scale of the partnership and the deployment of its technology in a leased fleet are new for Gatik, establishing it as a provider of “autonomous-delivery-as-a-service” (ADaaS) technology for its customers.

In its existing deals with Loblaw, Walmart and other Fortune 500 retailers, Gatik owns and operates its trucks. But under this arrangement, Gatik will lease and outfit Ryder delivery trucks with its built-in autonomous software and use them to provide middle-mile logistics services for its existing retailer customers. Ryder will also service and maintain the trucks and, in future, the two companies say they will explore opportunities for Ryder to manage the logistics operations of the autonomous fleet as well.

“Asset-light” model

In a press release, Gautam Narang, Gatik’s CEO, stressed the advantages of “maintaining direct relationships with customers while being asset-light” as keys to this business model. Leveraging Ryder’s know-how in fleet leasing, servicing and maintenance will enable Gatik to expand its services across the U.S. and Canada.

“The autonomous delivery as a service model is an end-to-end solution for retailers…Gatik manages customer relationships directly and integrates its autonomous solution seamlessly into customers’ supply chains to ensure timely delivery of goods with our fleet of autonomous box trucks,” adds Allison Matthews, a Gatik spokesperson, in an email interview with Electric Autonomy Canada.

Gatik and Ryder are launching their partnership in Texas, in the Dallas-Fort Worth area. It involves 20 medium-duty, multi-temperature box trucks designed for transporting goods to retail stores from micro-fulfillment centres and warehouses.

Gatik says it hopes to leverage the Ryder relationship to expand quickly elsewhere in the U.S. and Canada, though no timeframe has been announced.

“With Ryder’s extensive and sophisticated North American infrastructure, the partnership ensures Gatik will be able to commercialize operations at scale — quickly, safely and efficiently,” says Matthews.

First-time investors

In conjunction with this partnership, the companies also disclosed that Ryder, through its venture capital arm RyderVentures, was one of the investors in Gatik’s recent $85-million funding round, marking the first time Ryder has put money into an autonomous trucking company.

“One of our focus areas, not only for RyderVentures but for Ryder as a company, is on autonomous trucking technology,” explains Karen Jones, chief marketing officer and head of new product development for Ryder in the press release.

Through the investment, Ryder plans “to solve a host of industry pain points” and address “ever-escalating consumer demands,” such as “capacity constraints, driver shortages, and regulatory and safety pressures.”

“Gatik’s commitment to safety, focus on efficiency and affordability, and unique approach to structured autonomy make it a leader in autonomous middle-mile delivery — and a great partner for Ryder,” says Jones.

Ryder service and maintenance commitments under the deal include providing calibration of the sensors of the autonomous vehicles and completing any necessary pre-and post-trip inspections. The prospect of Ryder subsequently taking on management of the logistics operations of the fleet will allow “Gatik to focus on its unique, end-to-end ADaaS business model and manage long-standing relationships with its customer base,” reads the release.

Gatik on the road

From a technology perspective, Gatik is platform agnostic. The tech company already operates fleets of Class 3-6 autonomous box trucks that include trucks manufactured by Ford and Isuzu in Arkansas and Louisiana as well as the Greater Toronto Area with Loblaw.

While Gatik is headquartered in Palo Alto, Narang and his two co-founders are all Canadian landed immigrants and the company opened its Toronto operations in 2019. In March of this year, Gatik announced it had opened a new, larger facility in the city and that it had received nearly $1 million in funding through Ontario’s Autonomous Vehicle Innovation Network’s (AVIN) R&D Partnership Fund to support research, testing, hiring and real-world work.

“With this partnership with the Ontario government, and the grant specifically, we’re focusing on accelerating research and development related to winterizing our technology,” said Richard Steiner, Gatik’s head of policy and communications, in an interview with Electric Autonomy at the time of publication.

“It’s absolutely huge for us.”