Serve Robotics created its business model by solving a simple food delivery dilemma.

"We are moving two pound burritos in two ton cars and that doesn't make a lot of sense. It's incredibly inefficient," co-founder and CEO Ali Kashani told Yahoo Finance Live.

His company just announced a deal with Uber Technologies (UBER) to deliver food to Uber Eats customers in Los Angeles, starting early next year.

"You're experiencing labor shortages right now, it is a known thing. It's always been an issue. But robots are kind of stepping in to help with that, at the same time by removing cars off the street," Kashani said. He pointed out that delivery robots promise to make cities less congested and reduce carbon emission.

Nearly half of all restaurant deliveries in the U.S. are within a 40-minute walk, according to the company which said it can deliver food faster, safer, and cheaper than traditional car services.

Software logistics delivery firm Bringg predicts the food delivery business will generate $220 billion by 2023. It continues to grow rapidly following acceleration during the COVID-19 pandemic. Shares of DoorDash (DASH) rose this week on news it would acquire the Finnish food-delivery startup Wolt Enterprises Oy for about $8 billion.

And Uber just reported Q3 earnings that saw delivery grow 97% year-over-year, accounting for $2.2 billion of the companies $4.8 billion total revenue.

"Our goal is actually to take 5% of all food deliveries off the road in the next five years. That would be, to give you a sense, equivalent to about 100,000 vehicles being eliminated in the U.S. alone," Kashani pointed out.

Cute robots to deliver 'just you name it, everything'

Serve Robotics was founded as a division of Postmates in 2017. Uber bought Postmates in 2020 and early this year spun Serve Robotics off as a separate private company, "because we wanted to be able to partner with more folks and actually offer our service to others," Kashani explained, predicting his robots will do more than just deliver food.

"This is going to be grocery, this is going to be your convenience items, alcohol, I mean just you name it, everything."

Serve's robots can carry up to 50 pounds of cargo and run all day on a single charge. The friendly looking machines have names like Juno, Emma, Hugo and Keanu. Each can fit two large shopping bags or four large pizzas into their cargo bins.

Kashani said the robots will change the way people shop. "With robots, you can actually buy your shoes from the local store, support your local businesses, it will show up in three sizes, you will try them on, pick the one that actually fit, put the other two back into the robot and send it back."