By YU Hao

Chinese food delivery giant Meituan invested in two autonomous driving companies in the past month, Inceptio and Qcraft, the third and fourth this year. 

Meituan has long been interested in removing the human factor from deliveries, dabbling in ways to reduce the number of delivery staff since at least 2016. This year, Meituan sent delivery robots scuttling around an industrial park in suburban Beijing. A prototype for a drone with a three-kilometer range was released two months later. The robot vans have since delivered nearly 50,000 orders.

Meituan’s five autonomous driving companies cover almost the entire field: algorithms, freight, hardware, software and the vehicles themselves. A key factor behind the decision is rising labor costs.

The company spent 15.5 billion yuan (US$2.41 billion) on delivery staff in Q2 2021, 53 percent more than the same period last year. But labor costs are not just wages and salaries. Over a million workers deliver for Meituan every day. It’s challenging to manage such a large fleet with an extremely high turnover and increasing demand for better benefits. 

Investing more in robots does not mean Meituan is going to replace all the deliverymen. Some will still work with robots, but clearly, redundancies will be widespread and numerous.

Meituan’s Chief Scientist XIA Huaxia once said that technology and data for autonomous delivery could be useful in other applications, such as ride-hailing. Meituan reanimated the ride-hailing app in July. CEO WANG Xing is on record as saying that autonomous driving will enhance all of Meituan’s transportation-related services.

Meituan raised US$10 billion in April for autonomous driving, drones, and other technology. Since last year it has been spending heavily on robotics, semiconductors, and smart hardware. All these are years away from implementation.