Technology company Amazon is expanding its investments in transportation, a move that could bring it in competition with some of its business partners.
Companies that could be affected include United Parcel Service and Uber Technologies. Amazon’s new investments and alliances in the automotive supply chain are part of the reason. For example, Amazon could both send products to customers and provide services to car drivers.
Businesses such as Amazon Web Services and Fulfillment by Amazon started as efforts to cut costs and improve customer service. They later expanded to corporate customers. However, some experts say companies working closely with Amazon risk losing business to the online seller as its transportation-related business grows.
Amazon founder and chief executive officer Jeff Bezos has said little publicly about the company’s goals in transportation-related industries. But the company appears to be using its strengths in logistics, cloud computing and digital services to go into other fields. Reuters news agency spoke with more than 20 people who have knowledge of Amazon’s plans. They said the company wants to use its strengths to get into areas such as robotics and manufacturing.
John Ellis is a transportation business advisor formerly with Ford Motor Company. He said some corporate customers of Amazon “should be very scared” of the company’s move to provide services linked to cars. He thinks car buyers will be more interested in digital services used in cars and will not care whether they are “in a Ford or a Chrysler or a Chevrolet or a BMW.”
Amazon also has sought to get legal rights to sales, or patents, for technology related to cars and transportation.
Reuters studied more than 5,000 patents received by Amazon from December 2016 to May 2019 by the U.S. Patent and Trademark Office. The news service found that at least 210 of Amazon’s patents are for transportation-related technologies such as drones and driverless ground vehicles.
Amazon’s push to own transportation-related patents has been much larger than efforts by competitors Apple and Google, Reuters reports.
Amazon is also quickly expanding its business with car manufacturers. The company is working on two projects using its cloud-computing abilities with carmakers Ford and Volkswagen.
Gavin Sherry is chief executive officer of Autonomic, a subsidiary of Ford that provides digital services. He said Ford can learn a lot from Amazon, which is working with Autonomic and Ford to build a cloud-based system.
“They have the relationships, credibility and know-how that we will need in order to fulfill our vision,” he told Reuters.
Alexa, Amazon’s digital assistant service, is part of the company’s push to get inside cars. Amazon is working with a number of automakers to put Alexa into vehicles. The company has made deals with General Motors, Ford, Volvo and Honda to permit drivers to order products from their cars.
Ned Curic used to work for Toyota but came to Amazon to oversee Alexa Auto in 2017. He said the company wants Alexa in “as many vehicles as possible, either through direct integrations with automakers or through automotive accessories with Alexa built in.”
Amazon has placed a lot of effort in another area too: cutting the cost of transporting packages. It has mainly done this through the company’s Prime and Prime Air services.
Electric vehicles are another part of Amazon’s plans. Stephan Keese is with the international business advisor Roland Berger. He said Amazon is supplying home electrical charging systems for the e-tron electric sports utility vehicle by carmaker Audi. Kleese said the move could be a step toward doing more with vehicles.
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Words in This Story
supply chain – n. the network of organizations and activities that lead to a product’s assembly and delivery to consumers
founder – n. a person who creates or establishes something that is meant to last for a long time (such as a business or school) : a person who founds something
customer – n. someone who buys goods or services from a business
cloud computing – n. the practice of using servers to store and process data
logistics – n. the things that must be done to plan and organize a complicated activity or event that involves many people
drone – n. a pilotless aircraft
vision – n. a clear idea about what should happen or be done in the future
subsidiary – n. a company that is owned or controlled by another company
integration – n. from the verb integrate - to combine (two or more things) to form or create something