Putting your car to work

Unless you’ve been marooned on a desert island for the last few years, you’ll have noticed that the world of personal mobility is changing. Two economic tsunamis are converging: autonomous vehicles, and the on-demand economy. “Getting an Uber” has replaced “getting a taxi” in the popular lexicon. In a decade or so, the Uber you get will likely be driverless. This may lead to an end to private vehicle ownership – but not everyone sees the future that way. Others imagine we’ll keep our cars, but that we’ll use them very differently.

Today, I’m speaking to an entrepreneur with a surprising vision for the future of private motoring. I’ll hand you over to Alex Blakemore from toBoot, so he can explain.

AL: Hi Alex. Before we take a look at your firm, I’d like to start out by exploring some of your radical ideas for the future. Firstly, nobody likes delivery costs. How do you think they’ll change?

AB: There are big changes coming for delivery. Home deliveries from online shopping are still rising – and we expect this to continue. So there is still a great opportunity for innovation, on home delivery services.

Autonomous vehicles provide a great opportunity to reduce the cost of delivery. Uber have quoted that their costs drop by over 80% when they replace human-driven vehicles with autonomous ones. The savings in delivery could be even greater, since it may even be possible to remove bricks-and-mortar sorting offices from the delivery network. This is a far-out vision, where a car park of autonomous vans line themselves up in a car park. Lorry-loads of parcels arrive, and robots move the parcels from the lorry to the correct van ready to run the last mile delivery route. There is a lot of thought going in to how to automate the last mile of delivery right now – including flying drones and wheeled robots.  The key challenge is how you ensure the right person collects the parcel every time. Delivery direct to cars provides a solution to this that can be fully automated.

AL: How will almost-free deliveries change the way our lives are organised?

AB: When the cost of delivery falls significantly, retailers and businesses will be even happier than they are today to absorb the cost of delivery in sales costs. For the consumer, zero cost of delivery has very significant implications.

Today we store things in our home for convenience; our home is a warehouse, holding the inventory of things we need day-to-day. I know from experience that manufacturing companies hold inventory only when they need to, to maintain the smooth running of the production line. They constantly work to minimise stock. Storing stock costs money; it ties up capital which could be invested elsewhere.

When we think about how this applies to our homes, considering the revolution in music is useful. I used to store my music in my house on CDs. My CD rack gave me instant access to my music anytime I wanted to listen. If I didn’t store music I would have to wait for it to be delivered on a CD; this would not have been acceptable to me. Then it became possible to instantly deliver music to my house anytime, reliably, at no cost – and my habits changed. I stopped storing music in my house, as I no longer needed to. I stream the music I want, when I want. I pay for what I use with no delivery charge. It is instant.

I have now thrown away my CD rack. I no longer need to own music – and I can pay for what I use.

AL: That’s pretty radical. What other changes do you foresee?

AB: If, thanks to autonomy, physical delivery is free and available on-demand, this can unlock the expansion of the sharing economy. Rather than using up space in my shed for a lawnmower, I might have one delivered when I want to use it, and have it taken away when I am done. In a world of zero delivery cost, I need only pay for the use of the lawnmower; this must be cheaper in the long run than ownership. So I no longer need a shed, in fact I only need things that I would want to be available instantly.

The question is: how long am I willing to wait between my decision to use something, and the item being delivered? I want to be able to turn my TV on instantly, but maybe I don’t need to store tins of baked beans any more. Firms like Deliveroo are already changing the way we eat.

This vision of the future is quite different to what we know now, but we already see the boom in the sharing economy as an indicator that this behaviour change is our future.

AL: Now, looking at your firm: can you explain the problem that you’re trying to solve?

AB: Cars are only used 5% of the time in the UK. We use them for travelling from A-to-B – but almost nothing else. We will need our cars to do more, in a future world of low cost, convenient, on-demand mobility solutions.

AL: What exactly is toBoot?

AB: Have you ever had a parcel go back to the parcel depot because no one was home to receive it?  We believe on average you are wasting over 20 minutes when you have to go collect that parcel.

Many people have started to use click and collect, and locker options, to receive their parcels – but what if there was an even more convenient way to have your parcels delivered to a secure location?

toBoot is a business delivering parcels directly to cars. I know it sounds strange – but you can unlock a car remotely. This is done using either a smartbox installed into the car, or using the inherent-connected car technology of many newer cars.

AL: What inspired you to set the company up?

AB: The business idea was first incubated by Jaguar Land Rover, in their internal mobility hub. Market research showed us there was a real market, and a consumer need for the idea. Around 18 months ago Jaguar Land Rover set up InMotion – their venture arm primarily investing in new mobility products and services.

With the inception of InMotion, toBoot was born as a business – to be developed internally, and spun out when product-market fit is proven. I have an engineering degree, and worked at Jaguar Land Rover for 12 years in various engineering, project management and business management roles. I moved to InMotion as it was created, supporting mobility ventures with technical advice. Working with early-stage ventures ignited my passion for creating something new, and working towards something that can make a difference in many people’s lives. The opportunity arose to become CEO at toBoot about six months ago, and I took the challenge on with relish.

AL: What’s your business model?

AB: Many vehicle manufacturers have tried the model of delivering parcels to their own customers’ vehicles. Most have conducted costly trials to test the operation, but I believe none have found a model that can reach profitability. I believe limiting this service to a single brand of vehicle limits the possibility for a profitable scalable business. After all, retailers don’t want to be limited to sending purchases to one brand of car – they want a convenient solution that can apply to all cars.

We have tested charging customers per delivery, and actually proven some willingness to pay £2 per delivery. But to get to mass market, customers expect free delivery; in the long term, retailers and delivery companies will have to work out ways to fund direct-to-car deliveries. The other possibility is that vehicle manufacturers could fund it as a value-add feature for owners of their vehicles.

AL: What has been your smartest move?

AB: Not developing our own hardware. There is a saying in tech business, “Hardware is hard”. This sure is true! Specifying a hardware device, testing, and finding a manufacturer are all tough – but then you have to get over Everest, recovering the costs of hardware in the business model.

AL: What were the challenges in building and launching the business?

AB: When it comes to vehicle unlocking, every model of car is different – so there are a great variety of solutions to the question of secure remote vehicle unlocking. Only 5% of cars in the UK right now are connected cars; this is set to grow by at least 5% each year from now onward, but it will be some years before every car is connected. This means we have to look at a smartbox solution, and cover the cost of the hardware in the long-term business model.

AL: You mentioned secure vehicle unlocking, can you explain how that is achieved?

AB: We ensure that a vehicle is only ever unlocked by our “back end”. We identify that the correct delivery driver is at the correct location, within the specified time window, before unlocking can occur. This way we know who had access to the car boot. The delivery driver is required to take a photo at the point of delivery, to provide confidence that the delivery has been made. Finally we lock the boot of the car automatically once the delivery is completed and the boot is shut. Thanks to the support of InMotion, we have access to vehicle manufacturer IT security rules. We follow these – which ensures that our stored data is encrypted, and our system is secure.

AL: Finally, how can investors back your firm?

AB: toBoot is a pre-seed business. We’re excited to be building a platform to enable secure parcel delivery direct to cars now, and in the autonomous future. If your readers are interested in investing, they can contact me personally, via our website.


Is this a boot-iful business idea? Do let us know your views – andrew@southbankresearch.com.

Best,

Andrew Lockley
Exponential Investor

Category: Technology

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