“So when can I start ordering stuff off Amazon and get it delivered to my front door via drone delivery?”
It would be sweet to order stuff online and get it dropped off quickly.
But are there any problems holding drone delivery up?
I’m going to briefly discuss some of the background to this drone delivery buzz, why privacy won’t be an issue to drone delivery, what really is going on, and then dive into the three major legal problems with Amazon Prime Air becoming a reality for Americans.
Brief Background on the Drone Delivery Craze
Drone delivery has been all over the news with Amazon being the first to announce the projected use of drones to make deliveries. Others have followed the trend and announced deliveries such as the drone burrito delivery, the drone pizza delivery, etc.
In 2015, Dave Vos, the former head of Google’s Project Wing, said to an audience, “Our goal is to have commercial business up and running in 2017[.]” Fedex, UPS, DHL, Walmart, and everyone including your grandma’s dog has announced they are interested in drone delivery. Then, as if we hadn’t enough drone delivery buzz, Amazon published on December 14, 2016 a video showing their first customer delivery using a drone.
Drone delivery is really a small portion of the drone market, but thanks to Amazon, it is the “face” of the commercial drone industry. This has gone a long way to clean up a lot of the public stigma about the drone industry. On the topic of drones, people tend to think of Amazon delivery, not predator drones. Kudos to you Amazon for changing that.
These drone delivery announcements have worked so well that when I tell people I’m a drone lawyer, I almost always get asked about when drone delivery will become a possibility. My answer is not anytime soon.
………and it isn’t because of one of the most frequently raised issues.
Privacy –Frequently Raised, but not a Drone Delivery Legal Barrier.
I don’t think privacy issues are going to be a problem because of 3 reasons:
(1) In the terms of service that no one will read, the language will be used to the effect that says it’s cool with the property owner to have the drone descend over their house and drop off the package.
(2) Missy Cummings, a professor of mechanical engineering and director of the Humans and Autonomy Lab at Duke University, provided one potential solution of drone delivery companies and other companies partnering for delivery points. “Perhaps Starbucks could be your intermediary point.”
(3) Amazon’s patent on drone docking stations (attached to light poles or cell towers) won’t have property/privacy issues because that will all be taken care of in a contract agreement with the cell tower and power companies.
Most Drone Delivery News is of Operations Either Overseas or in Rural Areas
Most of what you have seen in the news is either in other countries, with different laws, or in rural areas of the U.S.
Up until August 29, 2016, we only had the Section 333 exemption process (now the 44807 process), the public certificate of waiver or authorization (which is statutorily prohibits commercial operations), or the airworthiness certificate process coupled with a certificate of waiver or authorization – all three are difficult to operate under in reality and only two allow commercial operations. Thankfully, Part 107 went into effect on August 29, 2016 and is far less restrictive than the previous three options. This is why you might have noticed that after August 29th, the drone delivery announcements and the accompanying photos in the U.S. have started to look closer to what we envision a drone delivery should look like.
Even though things have become better because we have Part 107 and the new update to Section 44807, areas of the law are still going to need to be changed before we see drone delivery at large scale.
3 Big Legal Problems With Drone Delivery Becoming a Reality for Americans.
These are the newly-created drone regulations that went into effect on August 29, 2016.
Part 107 does NOT allow air carrier operations. “‘[A]ir carrier’ means a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation.” “‘[A]ir transportation’ means foreign air transportation, interstate air transportation, or the transportation of mail by aircraft.” In other words, Fedex, UPS, DHL, USPS, or anyone crossing state or national borders cannot operate under Part 107.
One interesting point is that Matternet did obtain approval to fly package delivery under Part 107. Why? They were flying for one hospital company in one area and its was extremely limited. The Department of Transportation basically determined this was not an air carrier since it was so limited.
Here is where things start to get limiting under Part 107 for drone delivery:
The drone cannot be operated over a non-participating person or a moving vehicle. This is going to be hard to figure out because people and cars are constantly moving all over the place in residential areas and cities. If you want to fly at night, say 2 AM, to get around the people problem, you’ll need a Part 107 night waiver. Either way, you’ll need a waiver.
Following up on the last point, where are the most customers?
What are near cities? Airports….everywhere.
Let’s just pull some data from Arizona’s Amazon fulfillment distribution centers. Taxjar’s blog listed five address in Arizona (but it really is only four buildings).
#PHX3 – 6835 W. Buckeye Rd. Phoenix, AZ, 85043 – Maricopa County
#PHX5 – 16920 W. Commerce Dr. Goodyear, AZ, 85338 – Maricopa County
#PHX6 – 4750 W. Mohave St. Phoenix, AZ, 85043 – Maricopa County
#PHX7 – 800 N. 75th Ave Phoenix, AZ, 85043 – Maricopa County
I took these addresses and plugged them into the sectional map (green stars with green arrows) which shows us all the airspace in the Phoenix area. Calm down. I made it easy for you. I used to say to my flight students when I was flight instructing that these maps were like a form of job security because they are confusing to read. I marked out the areas where the drones cannot fly under Part 107 in red, unless they have an authorization or waiver.
Two of the fulfillment centers are in controlled airspace and would require an authorization or waiver to just take off.
In short, under Part 107, Amazon has a host of regulatory problems they need to conquer just with the FAA to have cost-saving operations, but Part 107 isn’t the only way to make a drone operation legal. There is also the Section 44807 exemption process.
Problem 2: FAA’s Section 44807 Exemption for Commercial Drone Operations
It’s a lengthy process and requires alot of paperwork.
On top of that, 44807 is only for the aircraft. You’ll still need an exemption from parts of Part 135 to carry packages for other people. If you think the exemption process is difficult, the Part 135 air carrier certification process can be brutal.
Thankfully, Google’s Wing Aviation, LLC managed to obtain the exemption and Part 135 operating certificate. But here is the thing, the Part 135 operating certificate was for a single pilot. Yes, this was the easiest of the Part 135 certifications to obtain but this means in the near term you won’t have drones flying all over the place because its currently just one guy. …..and he works for Google.
Problem 3: States, Counties, Cities, & Towns All Regulating Drones – Death by a Thousand Papercuts
I see the people who want drone delivery falling into three categories: (1) those that value immediately possessing the item more than paying a high price, (2) those that don’t have any other choice (there is no next best alternative or the alternative is outside of their purchasing power), or (3) those that value the item now but not more than a high price.
A. Those that Value Immediately Possessing the Item More than Paying a High Price (Early Adopters)
There are some areas that are not price sensitive such as:
(1) Those that need delicate, limited, expensive, rare types of medicine immediately because the alternative is injury or death.
(2) Critical pieces of an operation. For example, a large piece of machinery broke down and there are many people (that the company is paying) just sitting around waiting for replacement parts. How much is it per hour to have the machinery NOT running?
(3) The rich guy down by the remote lake wants an anniversary gift, that he forgot to buy, for his wife right now. Maybe this should be in the (1) category because it’s kind of life or death?
Drones provide a great solution for the above categories because these people are interested more in decreased time than decreased costs.
B. Those That do not Have any Other Choice (There is no Next Best Alternative or it is Outside of Their Purchasing Power)
In other situations, the drone might be the only feasible solution due to weather, disaster, lack of infrastructure, etc. (Think hurricane relief or Alaska bush pilots flying supplies into remote villages). If you are delivering to remote areas, you look at things differently. Flexport’s article discussing Matternet’s drone operations in Lesotho explained:
As Raptopoulos of Matternet points out, Google and Amazon’s plans ignore drones’ best feature: they can go where there are no roads.
“One billion people in the world today do not have access to all-season roads,” Raptopoulos told a TED audience in 2013. “We cannot get medicine to them reliably, they cannot get critical supplies, and they cannot get their goods to market in order to create a sustainable income.”
For the Matternet team, the most interesting question was not the cost per delivery. They wanted to compare the cost of the drone network to the cost of building the roads Lesotho so badly lacks.”
These two above categories are elastic with price, but the third category, will be affected by the states, counties, cities, or towns creating drone law. The first two categories might be the early adopters, but they will be the small minority of drone deliveries. Most people are near a road where a delivery truck can get to them and they most likely are not in a life or death situation.
C. Those That Value the Item Now but not More Than a High Price.
Amazon’s business model is that the drones will provide a lower cost of delivery.
Darryl Jenkins, who worked on the economic study outlook for the Association of Unmanned Vehicle Systems International, said in his presentation,“Amazon will be able to push the per unit cost of delivery to at least $1.00 per package causing all other competitors to either adopt or die.” This is because of the economies of scale. But here is the problem, with a greater number of drones and drones operating across the U.S., more and more non-federal drone laws will need to be complied with.
Most people have four layers of government applying to them. These governments might have created drone laws. For example, where I used to live on Palm Beach Island, I had four layers of drone laws that applied to me: the Federal Aviation Regulations, the State of Florida’s Freedom from Unwarranted Surveillance Act, Palm Beach County’s ordinance prohibiting model airplane flights in county parks, and Palm Beach Island’s drone ordinance.
It isn’t super hard to track the state drone laws from 50 states and the federal government, but we don’t know everything going on with all the counties, cities, villages, boroughs, etc.
It’s not a patchwork quilt of drone laws, it’s worse. It’s like a huge puzzle, and you have only a couple hundred pieces so you have to go on a scavenger hunt to find the remaining pieces, but you don’t know if you need 1,000 pieces or maybe 10,000 more and the number of pieces just keeps growing.
Also, local governments use all sorts of different terms to describe the same thing, such as unmanned aircraft, drone, model aircraft, etc. (they like to pretend they are the FAA) which further increases the times it takes to search.
These unknown areas are going to have to be checked into which means there is a need for a drone regulatory compliance department in Amazon which means $$$$. If the cost of compliance goes up, Amazon’s business model starts to make less and less sense compared to what they are already doing now.
Another aspect of these non-federal drone laws is that some of these laws are motivated not by the desire to decrease public risk, but to increase revenue. As a greater number of the non-federal regulators start catching on, Amazon and all the other companies interested in drone delivery start looking like revenue generators for local governments. Even if the local governments aren’t greedy, their focus on safety and protecting their citizens generally results in some type of “safety” requirement that needs to be proven before they issue a permit/license which further drives up operating costs for the companies.
We all understand the Amazon most likely won’t save any money at first on drone delivery, but the with more and more drone laws getting created, lobbying, compliance, monitoring, insurance, permitting, etc. will all start eating further into the cost savings which means costs savings won’t be realized for years and years down the line. At a certain point, one or two guys operating out of big delivery van starts to look like a good idea again.
Because of these local drone ordinances & state laws, drone delivery suffers death by a 1000 regulatory papercuts.
Many have written on this topic because they see the technology taking off. They see the progress in the technology that many have made and assume that drone delivery will be allowed soon. They get the “West Coast” mindset where they think if enough money and technology are thrown at the problem, it will be fixed regardless of the law. Additionally, most writing on or marketing drone delivery do not understand all the legal issues.
Aviation is an “East Coast” industry where the laws out of D.C. will heavily influence the business. Aviation is an extremely regulated environment. The faster the companies operating in this area realize that fact, the better off they will be so that they can actually do these types of operations.
Amazon still has a long way to go before drone delivery can be experienced in real life by the American public, not just as a short clip on the internet.