Self-driving vehicles were supposed to revolutionize transportation, but the reality has been less than ideal. Robotaxi fleets in San Francisco have been causing traffic congestion and creating problems for emergency vehicles. Meanwhile, promising robot truck startups are facing setbacks or outright failures. However, one upstart company named Gatik is taking a different approach to autonomous driving.
Gatik, which means ‘progressive’ or ‘fast’ in Sanskrit, is headquartered in Mountain View, California. Unlike its bigger neighbor Waymo, Gatik focuses on ‘middle mile’ deliveries rather than developing robotic taxis or semis. With a fleet of around 50 trucks, Gatik transports goods from warehouses to grocery stores, big box retailers, post offices, and fast food chains.
While Gatik has raised significantly less funding compared to industry giants like Waymo and Cruise, it is making progress in terms of revenue. CEO Gautam Narang expects the company to generate ‘high single-digit millions’ in revenue this year, and aims for up to $100 million within five years. Gatik has secured multiyear contracts with major retailers such as Walmart, Kroger, Pitney Bowes, and Canada’s Loblaws supermarket chain.
Gatik’s approach to autonomous driving is focused on doing the easy things first. By hauling goods instead of people, operating on fixed city routes at low speeds, and avoiding tricky intersections and sensitive locations like fire stations and schools, Gatik has been able to prove the effectiveness of its approach. The company’s fleet is currently making hundreds of delivery runs per week in Dallas, Fort Worth, San Antonio, and Toronto.
The market for middle mile deliveries is estimated to be worth around $250 billion annually, providing ample opportunities for Gatik’s growth. While competitors are targeting the much larger long-haul market or the taxi and ride-hailing market, Gatik has recognized the potential in middle-mile deliveries that others have overlooked. Waymo briefly experimented with middle-mile deliveries but has since shifted its focus to robotaxi services.
Gatik plans to expand its fleet to over 300 autonomous delivery vehicles by 2024, operating in multiple cities. The company is charging customers $200,000 per year per vehicle and expects to have more than 80 vehicles in its fleet by the end of 2023. Gatik’s business model is ‘asset light,’ concentrating on perfecting the AI technology that operates the trucks rather than building vehicles or sensors. The company leases vehicles from Ryder, a leading provider of rentals and services for the U.S. trucking industry.
To continue growing, Gatik plans to raise additional funds later this year. The company also has aspirations of going public, but profitability is a priority before considering an IPO.
While other autonomous vehicle companies focus on complex, fully autonomous systems, Gatik’s practical and niche approach is gaining recognition in the industry. Gatik aims to prove that its approach is viable and profitable in an industry that has faced numerous challenges and setbacks.
In conclusion, Gatik is redefining autonomous driving by prioritizing ‘middle mile’ deliveries and taking an ‘asset light’ approach. With its focus on doing the easy things first and securing key contracts with major retailers, Gatik has positioned itself for success in the growing market for middle mile deliveries. As the company continues to expand its fleet and generate revenue, it aims to prove that its approach to autonomous driving is practical, efficient, and profitable.
