By Deborah Sophia

(Reuters) – Fast-food chain Shake Shack and Serve Robotics are partnering to use autonomous sidewalk robots to deliver orders placed on Uber Eats, the companies said on Wednesday.

The partnership will cover select Shake Shack restaurants in Los Angeles, the companies added.

WHY IT’S IMPORTANT

Uber’s food delivery arm has been offering Serve’s autonomous deliveries in Los Angeles since 2022 and is focused on tapping more geographies across the U.S.

For Serve, the tie-up with Shake Shack would speed up its efforts to achieve its target of deploying up to 2,000 AI-powered sidewalk delivery robots on the Uber platform in 2025.

CONTEXT

Restaurants, retailers and other consumer-facing companies have been ramping up testing and roll-outs of technologies including robots, drones and self-driving cars, in a bid to cut down on delivery costs through automation.

Uber is also investing in autonomous technologies for its ride-sharing and food delivery operations, striking partnerships with companies, including Alphabet’s Waymo, as companies bet on the potential of autonomous driving systems.

MARKET REACTION

Shares of Serve Robotics, spun off from Uber in 2021, jumped nearly 30% in morning trade on Wednesday.

The company, which has partnerships with retailers such as 7-Eleven, late on Tuesday reported a more than seven-fold increase in revenue to $0.47 million for the second quarter ended June 30.