The days of working for cheap or free simply to get your drone company’s name out there (or to compete with every other drone pilot) seem to be gone. That’s good news for companies that fly drones as their bread and butter, given that a new report indicates that drone service provider revenues are shifting upwards.
And here’s a real kicker: drone service providers shared their top challenges in terms of what’s inhibiting growth. While not the biggest overall challenge, there’s one type of challenge cited by drone service providers that has seen a big year-over-year increase: difficulty finding qualified pilots.
If you’re a drone pilot looking for work, or you’re part of a company that flies drones as your business, this is good news. Here’s a deeper dive into what you need to know and can expect in terms of maximizing revenues this year:
Drone service provider revenues are rising — and more companies are pocketing six figures
Drone service provider revenues are a tricky thing to look at. What constitutes a drone service is broad — there are delivery services, mapping services, inspection services, and so on.
And from there, you have a range of company sizes. Many drone service providers are sole proprietors. It could be a drone enthusiasts with an entrepreneurial spirit and a thirst for the side hustle life, who flies drones on the weekends in addition to another job. It could be a small, local business of a few people. But drone service providers also constitute massive companies. There are drone delivery giants like Zipline and Wing, and remote-sensing drone service providers like Terra Drone and Aerodyne.
With the understanding that it can be tough to fit every, wide-ranging drone service provider in one box, overall, money-making is on the up and up.
Especially in the early days of drones, when everyone with a drone was trying to make a buck, there were many people making under $50,000 as a drone service provider. That might not be anything to sneeze at for a weekend side hustle, but it didn’t bode well for companies trying to build viable business models.
This year, the number of drone service providers with under $50,000 in annual revenue saw a 20-point drop, according to fresh data from research firm DroneAnalyst. Happily, nearly half (46%) of providers made more than $50,000 annually.
DroneAnalyst’s survey is still dominated by sole proprietors and teams smaller than five, indicating that it’s not the big, Zipline-size companies influencing the results. Quite simply, the small companies are at least growing their revenues.
“Now as the market has matured we’re seeing this race to the bottom end and revenues for service providers have made strong upward progress,” according to a post from David Benowitz, who leads DroneAnalyst.
Benowitz says there are a few reasons for this shift
- The companies that weren’t making money have called it quits: At this point in the drone industry, if you’re not making money now, it’s not looking good for the future. There’s a natural self-selection here.
- Increased business and agency spending on drone services: As more drone use cases spring up and companies get more comfortable with drones, there’s more opportunity for work.
- Service providers are overall getting larger. Some companies are consolidating and combining, naturally increasing revenues.
The surprising challenge that drone service providers still face
If it seems like everyone wants their dream job as a drone pilot, then this is especially good news: there’s a big shortage of drone pilots.
DroneAnalyst sought to uncover the biggest issues facing drone pilots, and — while not the biggest issue overall — there’s one type of issue that seems to be increasing: drone service providers can’t hire qualified pilots fast enough.
DroneAnalyst looked at how service provider issues have changed over time, and ‘increased frequency of difficulty finding pilots’ is a standout. While that was only a problem for about 6% of drone service providers in 2018, these days it’s a problem for more than 10% of them.
Meanwhile, other challenges that were previously major headaches, like ‘difficulty obtaining waivers’ and ‘slow adoption by industries’ have massively decreased.
“On the regulation side, it’s telling that we saw a large decrease in concerns around obtaining waivers or clearances,” Benowitz says. “This is largely due to efforts by the FAA & private industry on scaling LAANC and 107 waiver, with most movement happening on 107 waivers in the past two years.”
That said, the biggest issues overall among drone service providers, according to DroneAnalyst’s report, are:
- Limited working capital
- Regulations restricting BVLOS operations
- Illegal operators
- State and local restrictions on flight locations
- Difficulty obtaining waivers or clearance
Clearly a combination of insufficient funding and regulatory hurdles are still the top issues. Luckily, drone investment continues to grow, with 2021 seeing record drone investment (a figure which even-more impressively tripled 2020’s record numbers). 2022 could also break records thanks to some pretty hefty funding rounds this summer.
And we’re seeing some solid progress on the regulatory end, including seeing some significant BVLOS approvals and the release of the Federal Aviation Administration’s Beyond Visual Line of Sight (BVLOS) Aviation Rulemaking Committee (ARC) final report earlier this year.
The data comes from the 2021 DroneAnalyst Drone Market Sector Report, which is generated by responses from actual industry stakeholders (like you). And right now, DroneAnalyst is in the midst of collecting responses for next year’s version of the same report. You can fill out the survey to help next year’s data set here. What’s in it for you? Beyond getting a free summary copy of the report, you could also win one of two $400 gift cards.