The Future of Urban Goods Delivery: Drones and Depots


Online shopping has changed the way we get what we want, but soon online and app-based Urban Goods Delivery services will also change how what we want is brought to our doorstep.

Urban Goods Delivery (UGD) describes the industry that brings all sorts of goods- from pizza to furniture- to your doorstep. Historically this industry was split up, with every restaurant delivering its own food via hired drivers, but smartphones and modern online shopping has made it possible for companies like Amazon to deliver just about anything at lower prices than in the store.

The next steps for the UGD industry are Automated Vehicles (AVs) and smaller delivery robots for last-mile package carriers. As they can safely operate for longer and carry more goods, AVs and drones promise to be more efficient than traditional delivery. This will save customers money and time, creating a boom in the UGD industry that will require us to rethink how goods are delivered in cities.


The future of widespread UGD services is largely determined by the future of AVs. Automation could improve the efficiency of freight vehicles, which will be able drive for longer stretches of time and require fewer stops than a human driver, making it possible for goods to get to their destination faster. AVs may also develop greater capacity if multiple vehicles are linked up electronically, creating convoys or AV “platoons.” The combination of greater efficiency and capacity could drop prices for the customer and increase demand.

It is the lower costs for the customer and the operator that is the second crucial driver behind AV-powered UGD services. Lower transportation costs for same-day delivery will by made possible thanks to the more efficient AVs. In China, an e-commerce business called has started same-day delivery service to 100 rural villages with 40 drones. The drones are both 70% cheaper and faster than manned vehicle alternatives. Lower costs will induce greater demand, which will in turn create an even more efficient network of warehouses and distribution centers.


Despite these drivers, there are three clear barriers that UGD will have to overcome before you can order fresh vegetables to your door after midnight.

The first barrier is real estate. In order to provide same-day deliveries of all goods at an affordable price, the UGD industry will need to change its existing network of warehouses and distribution centers. Rather than relying on larger warehouses at the edge of town, UGD companies will need to construct many smaller facilities on centrally located (and more expensive) land. In order to build these facilities, the companies will also have to work with local governments to change zoning codes to allow for more warehouse facilities in areas where they were once excluded.

The second barrier is figuring out how to fit a new fleet of UGB AVs into cities that were not designed for them. While AVs will probably be safer to pedestrians than human drivers, they may struggle to reach peak efficiency in cities that do not have many pick-up/drop-off zones, or that limit automobile accessibility in downtown areas. If AVs are designed to always give right-of-way to pedestrians- even if pedestrians cross or stand in the middle of the road- some of them may become trapped in dense areas.

The third barrier are the laws and regulations that either need to be altered or do not exist for UGD AVs. An example of this might be parking requirements, which would need to be replaced with requirements for pick-up/drop-off zones. Another example is figuring out where aerial drones are permitted to fly, a question that will need to be answered by both local governments and the US Federal Aviation Administration (FAA). Lastly, some cities might want to reserve lanes for UGD vehicles in order to increase efficiency, similar to what many cities have already done for busses.

Key Players:

The key players behind an AV-powered UGD ecosystem are auto manufacturers, local and national government agencies, delivery services like Amazon and Uber Eats, and trucking and freight companies.

Auto companies like Daimler and Volvo are already investing millions into developing autonomous trucks, which will probably be the first AVs to hit the road. Local governments are paving the way for UGD AVs by setting up temporary trials, while the Federal and state governments are responsible for figuring out how the next era of UGD will impact transportation infrastructure and how to regulate the industry. Private companies like Alphabet and Uber are already working with governments to conduct trials and corner certain parts of the market. Finally, traditional freight companies that rely on human drivers will be fighting to stay in the game, either by adopting AVs or by being purchased by the larger companies.

Key Pilots:

There are several ongoing pilot programs and developments that reveal where the UGD industry is heading.

The first major indicator is UberEats, which expanded into 280 cities between 2014-2018. While this demonstrates how much demand there is for grocery and food delivery services, Uber has also purchased Otto, an autonomous trucking company. This company made the first AV truck delivery using public roads in the US in 2016.

On the smaller side, Starship Technologies has been piloting self-driving robots that ride on sidewalks. These small robots have already been tested in Washington D.C. and Redwood City, CA, where they delivered packages as well as food.

Lastly, in April 2019 the FAA gave permission to Alphabet to pilot Wing, a drone-delivery service, in parts of Virginia. This follows the US Department of Transportation’s 2018 announcement that it will be working with state and local governments, and private companies to work together on commercial drone testing. 

Use Cases:

The difference between a UGD industry that relies on drones, AVs, and a network of smaller warehouses across the city and what exists now is substantial.

When it comes to prepared food, a customer might order dinner from their favorite restaurant. Rather than going directly to the restaurant, the order might be sent to a separate kitchen built strictly for delivering food via AV, so the customer gets the same meal without having their order sit in line with orders from table customers- taking less time and without having to tip the driver.

Another example might be in housing appliances. If an apartment floods thanks to a broken faucet, the tenant can order the pieces they need and, thanks to a small distribution center nearby and a drone, the tenant can have the tools they need to fix the faucet within minutes.

Impact Areas:

The future of Urban Goods Delivery will likely see repercussions in all four of the Secondary Impacts in Urbanism Next’s Framework.

In the land use category, the change UGD AVs will bring to warehousing and delivery networks will be felt almost immediately. Without human drivers stopping at rest stops and with truck “platoons”, UGD vehicles will use the roads differently- possibly using different routes entirely. This may strain a road network built for human drivers. The new warehousing may also change worker commutes, causing congestion in new places. Finally, cheaper delivery costs might reduce the benefits of living in denser neighborhoods, where many amenities are within walking distance. This could cause residents to disperse to cheaper housing and lead to suburbanization.

This dispersal would lead to larger urban footprints. Urban design will have to account for a dramatic increase in pick-ups and drop-offs, possibly requiring new zoning laws and the removal of street parking in some areas. Since future UGD vehicles are likely to include drones, considerations will have to made regarding their flight paths, which may be obstructed by trees or telephone wires. Brick and mortar stores may switch to delivery only, to save on operation costs, or close down entirely. Such a change could have an enormous impact on a city’s street life and culture.

When it comes to transportation, while AVs may be less likely to cause an auto accident than human drivers, the decrease in transportation costs, surge in UGD demand, and increase in the number of hours a vehicle can be on a street could raise the number of cars on the road network at all hours. Even if the number of privately owned vehicles drops, this change could have a profound impact on pedestrian and bike activity, which is averse to sharing the road with cars. Urban designers will have to consider how these and other modes interact with AVs.

One of the first impacts an AV-powered UGD system will have on real estate will be through its warehouses and distribution centers. The presence of many, smaller warehouses may cause property values to spike in some areas and lead to conflict with zoning laws. Real estate developers may need to change their plans for a property to include amenities like delivery stations and shared dining spaces. At the same time, an increase in the number of food deliveries may become more difficult to generate “buzz” to keep commercial corridors thriving.


In terms of equity, the likely decrease in the cost of delivery for all goods will be a benefit to low-income households. These households will also be able to shop for essential goods without traveling, making it easier to find affordable housing without considering the distance to grocery stores and markets. However, future warehouses and distribution centers may see a constant stream of ground and air vehicles entering and exiting, causing noise and air pollution. It is crucial that planners and policy makers ensure that the location of these centers does not disproportionately impact communities of color and/or low-income households.

Walking to the store is one of the few opportunities Americans have to get exercise in their daily lives. With the availability of same-day delivery for virtually any good, there is a risk that people will take fewer trips and spend less time walking around commercial corridors or supermarkets. At the same time, the reduction of the need to drive a car to pick up goods could open opportunities for city dwellers to fill their time with other health-centered activities.

UGD AVs could be a double-edged sword. On the one hand, higher efficiency could cut down CO2 emissions by reducing the number of vehicles needed to deliver goods. That being said, the lower costs to the customer might increase demand substantially, therefore leading to more trips and higher Vehicle Miles Traveled (VMT). One method to reduce VMT as the UGD industry expands is to ensure that fewer empty or rider-less vehicles are allowed on the road.

The growing presence of AVs in the UGD industry will have a profound impact on the economy. While there is concern for the 4 million people who drive for a living, goods haulers might not be completely phased out of the UGD system, but may instead be at the front of an AV truck platoon or take on new responsibilities as a driver. However, the change UGD AVs will bring to the food industry may have a massive impact on the nation’s 2.6 million food servers[1] as restaurants choose to switch to delivery-only.

Finally, a much more prominent UGD industry fueled by AVs has profound implications for local, state, and national governance. At the local level, cities will have to redesign themselves to make room for more UDG vehicles, likely by changing street designs and zoning codes. State transportation agencies will have to prepare highway infrastructure for vehicles that will disrupt traditional peak/off-peak traffic control. At the same time, the federal government will have to determine how to regulate drone deliveries and the environmental impacts of 24/7 delivery services.

[1] Bureau of Labor Statistics:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s