While the COVID-19 pandemic shut down thousands of restaurants, hotels, gyms and salons, ranging from small businesses to major chains alike, the same can’t be said for drone delivery projects from big players like Wing and the UPS drone team.
“You’re hearing stories of businesses that put everything on pause, but drone delivery is growing faster than ever,” said Kevin Wasik, Head of Global Business Development at UPS Flight Forward, the drone delivery arm of the multinational package delivery giant. “The pandemic was only an accelerator for us.”
And other drone delivery giants, including Wing (the drone-focused, sister company of Google) and Zipline (which primarily focuses on medical deliveries) echoed Wasik’s sentiments during a panel at September’s Commercial UAV Expo Americas, which was held virtually this year. Wing, which focuses its U.S. deliveries primarily in Christiansburg, Virginia, said it saw a 5x surge in demand from customers wanting to get items delivered by drone.
Much of the increase in drone delivery is being instigated by the Federal Aviation Administration. Wasik said the FAA approached the UPS Flight Forward team at the beginning of the COVID-19, asking if they had any coronavirus-related use-cases. Naturally, UPS delivered.
UPS Flight Forward has ramped up a number of coronavirus-related projects, including transporting healthcare equipment around WakeMed’s campus in Raleigh, North Carolina. The company also partnered with CVS to deliver prescriptions to a retirement community in Central Floria called The Villages.
In Christiansburg, Virginia, which is part of the FAA’s Unmanned Aircraft Systems Integration Pilot Program, Wing drones are delivering library books from the local public library, and coffee and pastries from a local shop called Brugh Coffee. Brugh said it now sells double the cans of its cold brew by drone vs. cold brew sales through its curbside business.
Other drone delivery companies are also seeing growth of a different sort this year: investment. Volansi, which conducts vertical take-off and landing (VTOL) middle-mile drone delivery services, in September announced that it has closed $50 million in a Series B round of funding.
The challenge: can drone deliveries operate at scale?
The issue that has long plagued drone delivery for years: scaling operations.
For example, Wasik said that drone deliveries of UPS prescriptions to the people of The Villages went from two deliveries a day to 15 deliveries a day. Sure, that’s a 650% increase, but that’s hardly enough to consider a viable business.
The Villages is home to more than 135,000 residents, and of those, only 200 are eligible to participate in the UPS Flight Forward program. That’s far below 1% of the retirement community’s overall population.
Nagle acknowledged that Wing has the same problem.
“Being able to offer the service to more people is one of the big challenges,” she said. “How do we take (our drone delivery operations) out of single operating areas?”
Nagle blamed the shortcomings of being able to successfully scale beyond a small population of often-had-picked customers to a more sustainable business.
“It’s a technology, it’s an operations aspect, and it’s a regulatory aspect,” she said.
And for all the FAA has done to encourage drone delivery, especially amidst the pandemic, experts say the FAA is holding things back thanks to onerous restrictions and waiver requirements.
Nagle said the process of getting approved to conduct drone deliveries “is still a process of largely approval by exemption,” she said. “Getting approval is still a relatively time-consuming effort.”
Experts say a big issue is that the FAA is trying to take a one-size-fits-all approach, even if drones are a completely different size (literally) from most other aircraft.
“There may be different solutions for different operations,” Nagle said. “What works in a suburban area doing deliveries might be very different than a rural area doing inspections.”
Wasik’s proposed solution is that the FAA sets up a Flight Standards District Office specific to drones.
“Otherwise, they’re treating the UAV industry like a regular commercial airline, and it’s not,” he said. “In order for the FAA to follow through on some of their commitments, structurally they need to follow through on some of their commitments.”