Amazon's reported interest in buying the self-driving car startup Zoox would help the retail giant tighten its grip on its delivery network, an industry expert says

Despite Zoox's current focus on ride-hailing, Amazon's potential acquisition would likely be geared toward helping the retail giant develop its package-delivery network, said Benjamin Gordon, the founder and managing partner of Cambridge Capital, a private-equity firm whose areas of focus include transportation and logistics.

"They want to control their supply chain to make e-commerce frictionless, and that means controlling everything from the consumer's purchase to everything that takes that purchase to the customer's door," Gordon said of Amazon. "Zoox is really a piece in that puzzle."

Amazon has made it a priority to find faster and less expensive ways to deliver packages to customers, placing an emphasis on the final steps of that process, known as the "last mile," Gordon said. The company has moved to increase its control over last-mile logistics, and one of the next steps in that effort would be to use autonomous vehicles, Gordon said, as doing so would save Amazon money and simplify its supply chain.

For Zoox, the potential deal could serve as a lifeline. The company laid off 10% of its workforce in April, The Information reported, and Axios reported in February that Zoox was struggling to raise money. Experts have predicted the trend toward consolidation in the autonomous-vehicle industry will accelerate in the wake of Covid-19, and Zoox has a particularly capital-intensive business model, said Asad Hussain, a mobility analyst at PitchBook.

"Right now, they are in a position where they need to raise capital to stay afloat," Hussain said of Zoox. "This pandemic has come at an inopportune time."

But among the independent startups in the autonomous-vehicle industry, Zoox, along with Aurora and Pony.ai, has the best technology and the most talented employees, Hussain said. That means that, even if Amazon decides not to acquire it, Zoox would likely be able to find another buyer.

"Someone's going to buy them," Hussain said.

Amazon and Zoox declined Business Insider's request for comment on this story.

Are you a current or former employee of Zoox or Amazon? Do you have an opinion about Amazon's possible acquisition of Zoox? Contact this reporter at mmatousek@businessinsider.com. You can also reach out on Signal at 646-768-4712 or email this reporter's encrypted address at mmatousek@protonmail.com.

• Read more:
• Uber's self-driving car business may be at risk of shutting down as consolidation in the space ramps up, analyst predicts
• Amazon has a 'fail fast, fail often' culture, and executives use a tongue-in-cheek term to refer to shuttered initiatives
• A wave of consolidation is coming for the autonomous-vehicle business as industry insiders say it's getting harder for startups to raise money in the wake of COVID-19
• Amazon CEO Jeff Bezos told shareholders that his leadership team has done a 'remarkable' job during COVID-19: 'I'm proud of what we've done.'