The Economics of Drone Delivery
This is a guest post. The views expressed here are solely those of the author and do not represent positions of IEEE Spectrum or the IEEE. This post was originally published at the Flexport Blog.
Two years ago, Jeff Bezos promised that Amazon would soon deliver packages by drone. “I know this looks like science fiction,” the Amazon CEO told Charlie Rose on “60 Minutes” as he stood with several Amazon drones. “It’s not.”
Bezos’s primetime announcement sparked a lot of interest—and a media consensus that it was a publicity stunt to get Christmas shoppers thinking about Amazon. After all, federal law prohibited commercial drones from flying over populated areas, and airplanes were already experiencing close calls with hobbyists’ drones.
But the drone community is not acting like the prospect of delivering packages by drone is a pipe dream. Amazon just released an update of its Prime Air program. Executives at Google Wing claim they will deliver packages in 2017 via drone. Walmart has asked the Federal Aviation Administration for permission to test drone delivery, and venture capitalists have invested in drone delivery startups.
So what makes the drone community believe deliveries are a good idea? Assuming the technology works, do the economics make sense?