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Online grocery services struggle to meet spike in demand

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Online grocery services

By KELVIN CHAN AP Business Writer

LONDON (AP) — A pandemic forcing everyone to stay home could be the perfect moment for online grocery services. In practice, they’ve been struggling to keep up with a surge in orders, highlighting their limited ability to respond to an unprecedented onslaught of demand.

After panic buying left store shelves stripped of staples like pasta, canned goods and toilet paper, many shoppers quickly found online grocery delivery slots almost impossible to come by, too.

“It’s kind of becoming more challenging to put a meal together,” said Paul Smyth, a software engineer who lives near Manchester, England, where the online groceries industry is particularly advanced. He’s a longtime customer of British online-only supermarket Ocado but hasn’t been able to land a slot since he received his last delivery two weeks ago.

The problem for many delivery services is ramping up staff to pick goods in shops and deliver. But for Ocado, a cutting edge service that relies on warehouse robots, significantly increasing deliveries would mean a big investment in new machinery and warehouses too late to catch the spike in demand.

Smyth said he’s starting to run low on meat and frozen goods, but wants to avoid going to a supermarket because he worries his asthma, diabetes and high blood pressure are risk factors if he catches the new coronavirus.

“I won’t be panicking for another week, but if I’ve got to wait another two weeks for a delivery slot it’s going to be very close to the bone.”

The coronavirus crisis is giving the e-commerce industry a boost but troubles at Ocado and other online grocers highlight how hard it is for the industry to quickly scale up online delivery.

In the U.S., grocery shopping had only been slowly migrating online, making up 3% of the food retail market, according to a report last year by Deutsche Bank.

As the crisis hit, delivery orders surged as millions of Americans stayed home. During the week of March 2, even before some cities and states imposed “stay at home” orders, Instacart, Amazon, and Walmart grocery delivery sales all jumped by at least two-thirds from the year before, according to Earnest Research. Instacart, a platform that partners with more than 25,000 stores in North America, says orders in more recent weeks have surged 150%.

As a result, customers in hard-hit New York City are waiting days to schedule deliveries that usually take just hours.

In China, where the outbreak originated early this year, ubiquitous smartphone food apps helped millions get through months of strict lockdown. Even so, e-commerce giant Alibaba’s supermarket chain Freshippo reportedly recruited laid off restaurant workers for temporary staff as more customers shifted to ordering by app and average basket sizes jumped in the first half of February.

Britain’s online grocery market, one of the world’s most advanced, is estimated to account for 8.3% of all sales in 2020, according to market research firm Mintel. Nevertheless, Ocado and the online arms of bricks and mortar rivals like Tesco, Sainsbury’s and Walmart owned-Asda were all booked up. To be fair, they’re prioritizing slots for vulnerable customers.

Ocado has pioneered online groceries in the U.K. since 2002 with automated warehouse robots and has licensed its technology to other companies including Kroger. That experience wasn’t enough when its website melted down after traffic quadrupled.

The company battled to get systems back to normal by taking its smartphone app offline and stopping new account signups. It temporarily blocked its website, then made all visitors wait in a virtual queue, alienating long-time users.

“It just felt as if they’d completely abandoned customers,” said Smyth, 50, who waited as long as four hours online only to find there were no delivery slots. Ocado now has a new system to allocate slots but Smyth still hasn’t had any luck and is getting by with basic items from a local shop.

CEO Melanie Smith emailed customers to tell them demand spiked to 10 times the normal level. Her message came after Prime Minister Boris Johnson announced new lockdown rules and urged people to use food delivery services.

Every time the British government announces new measures to fight the virus, she said, “we see a further extraordinary surge of customers.”

“No matter how hard we work, we will not have enough capacity to serve the unprecedented levels of demand.”

Ocado operates three warehouses where cube-shaped robots on wheels zip along vast grids, picking up crates of soda, teabags, or apples and delivering them to “picking stations.” There, humans or robot arms put together customer orders to be delivered by a fleet of vans.

The company said it handled 343,000 orders per week in the quarter ending March 1, and sales have since doubled. Analysts note the main factor influencing growth in an automated system like Ocado’s is warehouse capacity.

“There are only so many of those warehouses you can build,” said Simon Bowler, an analyst at Numis Securities. It takes up to two years for Ocado to build a warehouse, so “saying today, we’re going to build a new warehouse, it doesn’t solve the problem here and now.” A fourth warehouse was destroyed by a fire last year.

Traditional supermarkets have their own less sophisticated online operations, using people to pick items off shelves.

That is “a bit easier to flex to sudden huge increases in demand,” said Bowler – you just need to hire more people.

Companies have started doing that. British supermarket Morrison’s is hiring 2,500 extra drivers and pickers. Amazon is looking for 100,000 more staff, while Instacart plans to add 300,000 gig workers, more than doubling the number of people it has picking and delivering groceries.

Still, Instacart’s workers have struggled to meet efficiency targets, as stores impose distancing rules and business surges.

That highlights the main downside to human store pickers, Bowler said: They’re 10-15% less cost efficient than robots.

__

Zen Soo in Beijing and Alexandra Olson in New York contributed to this story.


Follow AP coverage of the virus outbreak at https://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak.


Follow Kelvin Chan at twitter

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Study: Autonomous vehicles won’t make roads completely safe

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StudyAutonomousvehicleswontmakeroadscompletelysafe

By TOM KRISHER AP Auto Writer

DETROIT (AP) — A new study says that while autonomous vehicle technology has great promise to reduce crashes, it may not be able to prevent all mishaps caused by human error.

Auto safety experts say humans cause about 94% of U.S. crashes, but the Insurance Institute for Highway Safety study says computer-controlled robocars will only stop about one-third of them.

The group says that while autonomous vehicles eventually will identify hazards and react faster than humans, and they won’t become distracted or drive drunk, stopping the rest of the crashes will be a lot harder.

“We’re still going to see some issues even if autonomous vehicles might react more quickly than humans do. They’re not going to always be able to react instantaneously,” said Jessica Cicchino, and institute vice president of research and co-author of the study.

The IIHS studied over 5,000 crashes with detailed causes that were collected by the National Highway Traffic Safety Administration, separating out those caused by “sensing and perceiving” errors such as driver distraction, impaired visibility or failing to spot hazards until it was too late. Researchers also separated crashes caused by human “incapacitation” including drivers impaired by alcohol or drugs, those who fell asleep or drivers with medical problems. Self-driving vehicles can prevent those, the study found.

However, the robocars may not be able to prevent the rest, including prediction errors such as misjudging how fast another vehicle is traveling, planning errors including driving too fast for road conditions and execution errors including incorrect evasive maneuvers or other mistakes controlling vehicles.

For example, if a cyclist or another vehicle suddenly veers into the path of an autonomous vehicle, it may not be able to stop fast enough or steer away in time, Cicchino said. “Autonomous vehicles need to not only perceive the world around them perfectly, they need to respond to what’s around them as well,” she said.

Just how many crashes are prevented depends a lot on how autonomous vehicles are programmed, Cicchino said. More crashes would be stopped if the robocars obey all traffic laws including speed limits. But if artificial intelligence allows them to drive and react more like humans, then fewer crashes will be stopped, she said.

“Building self-driving cars that drive as well as people do is a big challenge in itself,” IIHS Research Scientist Alexandra Mueller said in a statement. “But they’d actually need to be better than that to deliver on the promises we’ve all heard.”

Partners for Automated Vehicle Education, a group with many self-driving vehicle companies as members, said Thursday that the study incorrectly assumes superior perception and lack of distraction are the only ways autonomous vehicles can drive better than humans.

Autonomous vehicles, for instance, can be programmed to never break traffic laws, which the study blames for 38% of crashes. “The assumption that these behaviors could be altered by passengers in ways that so dramatically reduce safety is inconsistent with what our members tell us about the culture they bring to AV development,” said a statement from the group, which includes Ford, General Motors, Waymo, Lyft, Daimler, Volkswagen and others.

Study numbers show autonomous vehicles would prevent 72% or crashes, the group said, but the vehicles are so complex that the ultimate impact is only a guess.

Yet Missy Cummings, a robotics and human factors professor at Duke University who is familiar with the study, said preventing even one-third of the human-caused crashes is giving technology too much credit. Even vehicles with laser, radar and camera sensors don’t always perform flawlessly in all conditions, she said.

“There is a probability that even when all three sensor systems come to bear, that obstacles can be missed,” Cummings said. “No driverless car company has been able to do that reliably. They know that, too.”

Researchers and people in the autonomous vehicle business never thought the technology would be capable of preventing all crashes now caused by humans, she said, calling that “layman’s conventional wisdom that somehow this technology is going to be a panacea that is going to prevent all death.”

IIHS researchers reviewed the crash causes and decided which ones could be prevented, assuming that all vehicles on the road were autonomous, Cicchino said. Even fewer crashes will be prevented while self-driving vehicles are mixed with human driven cars, she said.

Virginia-based IIHS is a nonprofit research and education organization that’s funded by auto insurance companies.

More than 60 companies have applied to test autonomous vehicles in California alone, but they have yet to start a fully-robotic large-scale ride-hailing service without human backup drivers.

Several companies including Alphabet Inc.’s Waymo and General Motors’ Cruise had pledged to do it during the past two years, but those plans were delayed when the industry pulled back after an Uber automated test vehicle hit and killed a pedestrian in March 2018 in Tempe, Arizona.

Tesla Inc. CEO Elon Musk last year promised a fleet of autonomous robotaxis would start operating in 2020. But recently he has said he hopes to deploy the system with humans monitoring it in early 2021, depending on regulatory approval.

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Germany, France hope cloud data project to boost sovereignty

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By GEIR MOULSON Associated Press

BERLIN (AP) — Germany and France on Thursday launched a project to set up a European cloud computing platform that they hope will enhance European economic sovereignty in the wake of the coronavirus crisis and break the continent’s dependence on U.S. and Chinese companies.

The platform, entitled GAIA-X, is meant to be up and running — at least in prototype form — at the beginning of next year and be open to users from outside Europe that commit to adhere to European standards. German Economy Peter Altmaier said that the aim is “nothing less than a European moonshot in digital policy.”

Germany and France will set up a non-profit association to coordinate and organize the data infrastructure, Altmaier said. Conceived last year and initially announced in October, GAIA-X follows on the heels of an existing push by the European Union’s two biggest economies to set up a car battery consortium aimed at catching up with Asian rivals.

The cloud computing project “could not have been more timely” as Europe tries to dig itself out of a deep recession caused by the coronavirus crisis, French Economy Minister Bruno Le Maire said.

“With the COVID crisis, companies massively shifted to teleworking. This makes the need for (a) secure and European cloud solution all the more urgent,” Le Maire told a news conference by video link from Paris.

“The crisis also showed that the giant tech companies are the winners … the European digital space has to be protected,” he added, pledging that the new platform “will ensure the application of policy rules based on EU values and standards.”

“We are not China, we are not the United States — we are European countries with our own values and our own economic interests that we want to defend,” Le Maire said. He stressed the importance of “interoperability,” allowing companies to switch easily to the new system without losing any data.

The two ministers said the project has brought together 22 companies in France and Germany, including Dassault Systemes, Orange, Siemens, SAP, Robert Bosch and Deutsche Telekom. They didn’t give financial details. Le Maire called on “all other European companies and countries” to join the initiative.

Beyond that, “the idea is that we invite companies across the world providing their cloud services according to European standards and rules,” Altmaier said. “Everyone who wants to have the label of GAIA-X will have to respect and to satisfy several sets of rules,” including on interoperability and data migration.

He said that the project’s success “will be crucial for Germany, for France and for Europe as far as our economic strength, our competitivity and our sovereignty are concerned.”

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Snapchat to stop ‘promoting’ Trump amid uproar over tweets

Inside Telecom Staff

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Snapchat to stop 'promoting' Trump amid uproar over tweets

By BARBARA ORTUTAY AP Technology Writer

OAKLAND, Calif. (AP) — Snapchat will stop “promoting” President Donald Trump on its video messaging service, the latest example of a social media platform adjusting how it treats this U.S. president.

Last week, Twitter placed fact-check warnings on two Trump tweets that called mail-in ballots “fraudulent” and predicted problems with the November elections. It demoted and placed a stronger warning on a third tweet about Minneapolis protests that read, in part, that “when the looting starts the shooting starts.”

Snapchat’s action is more limited. It means only that the president’s posts will no longer show up in the app’s “Discover” section, which showcases news and posts by celebrities and public figures. Trump’s account will remain active on Snapchat and visible to anyone who searches for or follows it.

The decision, which Snap — the owner of Snapchat — says was made over the weekend, puts the Santa Monica, California-based company in Twitter’s camp after that company escalated its actions against Trump.

Facebook, meanwhile, has let identical posts stand, although the company and CEO Mark Zuckerberg face growing criticism over the decision.

“We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover,” Snap said in a statement Wednesday. “Racial violence and injustice have no place in our society and we stand together with all who seek peace, love, equality, and justice in America.”

Snapchat has 229 million daily active users. Twitter, by comparison, has 166 million. Unlike Twitter and even Facebook, Snapchat is generally used as a private communications tool, with friends sending each other short videos and images and, to a lesser extent, following celebrities and other accounts.

In a tweet, Trump campaign manager Brad Parscale said Snap CEO Evan Spiegel “would rather promote extreme left riot videos & encourage users to destroy America than share positive words of unity, justice, and law & order from our President.”

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