Refraction AI's Luke Schneider Is Going the Distance

CEO talks Chick-fil-A partnership, new hardware, industry's "trough of disillusionment"

It’s been almost two months since we checked in with an exec leading the charge at a delivery robotics startup, but our latest installment is well worth the wait. Luke Schneider, who serves as CEO of Refraction AI, heads a company that’s been a tad more coy with the press than some of its industry peers. He’d rather be hard at work in the background, scoring major partnerships with the likes of Chick-fil-A, while others fight for the limelight. Leading a team that spans Ann Arbor, MI and Austin, TX, it sounds like Refraction has some developments in the works that should keep its competitors on their toes.

Refraction AI

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Jonah Bliss: Thanks for chatting, Luke. Why don’t we start at the beginning; what brought you and the Refraction team together, and why did you all decide to work in this space?

Luke Schneider: I like to think we were brought together as kindred spirits. Transportation technology has been a noisy, adolescent space for most of this century, and the entrenched models of the last century continue to experience disruption and innovation on a constant basis. The people at Refraction are all passionate about the same thing – leveraging technology to transform transportation in a practical way – we just had to fight through the noise to get there. Refraction promises safe, reliable last-mile delivery with dramatically less energy consumption, virtually no carbon footprint, at a tiny fraction of the cost of conventional delivery. Thank goodness we found each other!

JB: You in particular have an interesting mobility background – Flexcar, Zipcar, Silvercar, you know I’m a true believer in carsharing – what’s the throughline between that experience and what you’re building today?

LS: I think the legacy automotive industry worked well for the first 80 years but has been steadily failing us for the last 40. Happily, we’re at a moment when technology, policy, consumer sentiment and business models are all ready to support better approaches. With the car-sharing companies we developed workable technology models and reliable operations but struggled with challenging unit economics. At Silvercar we improved on the customer experience and optimized economics. Refraction AI represents a kind of synthesis of all those companies, combining technology, service design, and field execution to dramatically redefine the way people get their goods. The common thread is better serving demand for transportation – goods or people – by making it safer, cleaner, more convenient and of course, less expensive.

“I love the idea of a regulator all-star team! We have exposure to regulatory bodies in a handful of states and cities, and that experience has been quite varied.”

JB: Let’s talk a bit about the Rev-1; what’s the company's approach to hardware?

LS: REV-1 was the brainchild of our founders Matt Johnson-Roberson and Ram Vasudevan, great friends and accomplished leaders in the fields of robotics and self-driving cars. When they launched the company they modeled the hardware on bicycle couriers, reasoning it was the most effective way to meet customer requirements for range, payload, speed and cost. Road margin operation has distinct advantages over sidewalks without the technical and regulatory complexity of regular traffic lanes. We’re on generation 2 of that initial design now, and we couldn’t be happier with the performance.

How the competition stacks up | Refraction AI

JB: How do you approach partnerships and biz dev? You’ve scored some marquee clients like Chick-Fil-A, is that your ideal customer persona?

LS: Chick-fil-A is an outstanding partner, and one that represents our approach well. Most robot delivery companies have a “delivery-as-a-service approach”, echoing the strategy of micromobility, car-sharing and other asset-based technology-enabled services. That generally means flooding the streets with assets and pursuing a large number of relatively small customers. We’re not so enamored of that idea, so our approach has been “robot-as-a-service”, targeting a relatively small number of large customers, looking to counteract the effects of intermediation and retain or strengthen their brands. Customers subscribe to dedicated delivery robots and deploy them in whatever capacity they need. They even customize their interiors and brand the exteriors. We’ve found this to be a scalable, capital efficient strategy that helps our customers translate outstanding guest experiences into outstanding delivery experiences.

“…it wasn’t hard to predict irrational exuberance and hype… and ultimately disappoint when we didn’t find ourselves awash in $100 LiDARs or $50 Jns.”

Q: Is there anything you can share with us on the financial side? How does the company intend to monetize?