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UPS Is Thinking About a Future With Autonomous Vehicles

Will the race towards fully autonomous driving weigh on UPS? TheStreet discusses the company's autonomous efforts with CFO Richard Peretz.
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UPS (UPS) - Get United Parcel Service Inc. Report is caught in the middle on whether to aggressively pursue autonomous vehicles. 

"In autonomous, we are kind of in between," UPS CFO Richard Peretz tells TheStreet. Peretz says UPS' autonomous driving efforts are being done in test environments, not on public roads. 

"The driver is an important part of the value proposition for our customers," Peretz says.

In a blog post on its website, UPS acknowledges the inevitable army of self-driving vehicles likely to disrupt many industries:

"Self-driving vehicles will transform the way businesses and services connect with their customers and users.

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Industrial distribution is already being transformed by big data, and self-driving vehicles will boost efficiency even more. Modular, self-driving vehicles can adapt to different uses, reducing operating and ownership costs and improving delivery schedules. In Australia, mining conglomerate Rio Tinto is using self-driving trucks at two iron ore mines, reducing costs and accidents.

Healthcare services would be transformed with faster emergency response times and autonomous vehicles that transport patients to medical appoints or deliver medication and supplies.

For industrial and retail sellers, self-driving vehicles can make faster deliveries, guided by more accurate maps that know the location and distance between homes or loading docks. The vehicle could find buyers anywhere, guided by GPS data from the consumer's mobile device."

Walmart (WMT) - Get Walmart Inc. Report is also thinking about the same future and how it may disrupt package delivery.

The world's largest retailer has linked up with Alphabet's (GOOGL) - Get Alphabet Inc. Report  driver-less car platform Waymo for a pilot program in Phoenix to advance the technology's use. Users of Waymo's "early riders" program will be able to use driver-less shuttle service to and from Walmart to pickup orders placed online.

UPS' international business continues to do well despite rising trade tensions, says Peretz.