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Waymo's autonomous cars become UPS' newest delivery drivers

Plus, UPS orders 10,000 electric delivery vehicles from automaker Arrival.

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- 02:32
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A Waymo minivan in action.

Waymo

UPS uses hundreds of planes and thousands of trucks to deliver about 20 million packages a day. In Phoenix, it'll start getting some help doing all that work from some self-driving minivans.

The delivery giant said Wednesday that it teamed up with Waymo, the self-driving car company owned by Google parent Alphabet, to test out using Waymo's fleet of autonomous vehicles to move packages. In the coming weeks, Waymo Chrysler Pacifica minivans will start driving residential and business shipments dropped off at UPS Stores around Phoenix and drive them to a nearby UPS sorting building for processing.

The vehicles will drive themselves, though a driver will be on board to keep tabs on things. The self-driving cars are expected to get packages into UPS' network faster and more frequently, helping speed up deliveries. A UPS spokesman said there aren't currently plans to use this program to deliver packages directly to customers' homes.

The UPS partnership is part of Waymo's ongoing work in Phoenix, where it started testing a ride-hailing service three years ago. Last year, Waymo began testing these rides without a safety driver at the wheel. Also in 2019, it grew an existing partnership with AutoNation to test out autonomous delivery of auto parts. The autonomous-car company said it's using the new UPS partnership to figure out even more ways to use its vehicles to move people and stuff. 

The project also adds to UPS' experiments with many new forms of delivery, with the company working especially on using drones to deliver packages within hospital campuses. Adding self-driving minivans to its fleet could help it manage more packages and potentially get items to customers more quickly. UPS is working on these new concepts to develop the future of shipping logistics and keep up with Amazon, which is also working on drone deliveries.

Now playing: Watch this: A ride on public streets in Waymo One
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In addition to the Waymo deal, UPS said Wednesday that it made a minority investment in Arrival, a London-based maker of electric vehicles. UPS also agreed to buy 10,000 electric delivery vehicles from Arrival. This partnership echoes Amazon's agreement last year to invest in Plymouth, Michigan-based electric vehicle maker Rivian and purchase 100,000 electric delivery vans from the company.

Also on Thursday, UPS said it expanded its drone delivery service to the University of California, San Diego health system. The shipper is already providing drone deliveries on a handful of hospital campuses in the US. For example, at WakeMed's flagship hospital campus in Raleigh, North Carolina, the company is sending lab samples back and forth between neighboring buildings and the central lab center. UPS, along with its drone partner Matternet, have already finished over 1,900 flights to deliver WakeMed lab samples.