In October 2017, President Trump issued a directive that called on the FAA and Transportation Department to work with local officials to enable American companies to use drones for delivery purposes. This, combined with the fact that Amazon, Boeing, Domino’s Pizza, and Chipotle in conjunction with Google have all already either tested, or fully built out delivery drone systems, indicates a bright future for drone delivery.
We decided to see how feasible this future really is. Using data from hundreds of former employees at Amazon, Uber, and large drone manufacturers, we compared drones with bicycles and cars to determine the cost, speed, and efficiency for each different method. What we found points to a future that is very much in line with Amazon’s drone delivery infrastructure: drones are highly cost effective and speed effective at short distances in optimal weather.
Drones Just Make Sense
Drones are extremely cost effective because they’re autonomous. The actual cost for a drone is significantly more than the cost of a bike ($6000 vs. $600), but when you factor in the cost of hiring a person to ride that bike, the overall price skyrockets. To boot, even though the bike does not consume fuel, it is so much slower than drones or cars that it ends up costing much more simply by virtue of the hourly cost of hiring a person. Cars end up being cheaper than bikes because of their speed, even though their upfront costs are higher. Both forms of delivery are still significantly more expensive than drones due to the costs of hiring drivers.
This data may change when autonomous vehicles are allowed on the road — but it is highly unlikely that this will occur until after 2025, according to the panel of NewtonX experts. Furthermore, even when it does occur, cars will still not beat drones when it comes to speed — even if a future of autonomous vehicles minimizes traffic.
Under the FAA drones are allowed to fly at up to 100mph. But the actual speed is less important than the fact that drones don’t have to abide by the congestion and flow of traffic: there are no stop signs, pedestrian crossings, construction, or other barriers to flight in the sky (other than, of course, weather). In fact, our data shows that drones are expected to get faster over the next seven years, shaving off over one minute per 5 miles by 2021, and three minutes per 5 miles by 2025.
How Far Are Drones Flying?
Because of height limitations, weather variability, and the fact that currently drones can only fly 5.5 miles before needing a recharge, Amazon for one has invested heavily in warehouse spaces close to population centers to minimize delivery time. This was a smart move for drone delivery — and it certainly builds confidence that the ecommerce behemoth will be able to delivery on its promise of 30-minute shipping with Amazon Prime Air.
As our data shows, batteries will become cheaper and lighter over the next few years, enabling drones to make longer flights. This has significant implications both for commercial commerce and for other endeavors, including medical deliveries in remote or war-torn areas, surveillance of large building sites, and agricultural uses.
On the commercial side, it could reduce the need for warehouse space in urban centers, and also decrease the need for hiring drivers. Of course, cars are still necessary both as a failsafe for when the weather is too poor for drone deliveries, and for delivering large items. But if drones can make the smaller daily deliveries from 12 miles outside of an urban center, this would drastically reduce company costs, as well as congestion within city limits.
What Are The Limitations to Drones?
Amazon drones can reportedly only carry up to five pounds — and while this capacity will probably increase in the next five years (when Jeff Bezos predicts that his drone fleet will be allowed to roam the skies), it’s unlikely that they will end up carrying much more than a dozen pounds, simply because the cost of the battery needed to power a drone that carries that much doesn’t pay off.
Drones are also highly at the whim of weather — not just wind, snow, fog, and rain, but also daylight. The FAA is almost certainly going to disallow drone delivery past sunset, so any service that offers it will be limited to specific hours of the day. For Amazon’s purposes this isn’t so restrictive as to make the Amazon Prime Air not worth it, but for food delivery services, like Dominos, which delivers for lunch and dinner, this could be commercially detrimental during the winter months.
Fiction or Reality? The Current State of Drone Policy
Last week, President Trump recommended his personal pilot for the head of the FAA. Trump has been vocal about this desire to expedite regulatory processes for commercial drone fleets, and if his personal pilot is chosen to head the FAA, it’s likely his wish will be met.
The FAA has currently suggested that Bezos’ 3-5 year timeline is accurate from a regulatory standpoint. But the committee has also experienced holdups relating to tracking and safety issues — for instance, preventing drone drug deliveries. It is likely that more power will be given to individual states for implementing specific rules and regulations, while the federal government will mandate the use of certain safety features.
Whether it takes three years or seven years, one thing is certain: in the next decade, it won’t be a delivery boy dropping off your replacement headphones; it’ll be a drone.
The data and insights in this article are sourced from NewtonX experts. For the purposes of this blog, we keep our experts anonymous and ensure that no confidential data or information has been disclosed. Experts are a mix of industry consultants and previous employees of the company(s) referenced.