That Buzz You Hear Isn’t An Amazon Drone

A quick Google GOOG -0.16% search on the phrase “Amazon drone” yields 637,000 hits. If the online retail giant never delivers a single package via drone aircraft, CEO Jeff Bezos’ appearance on 60 Minutes and the ensuing publicity has already done its job for Amazon. While IBM IBM -0.79% reports that “Cyber Monday” sales were up 17.5% over a year ago, Amazon’s numbers blasted 44% skyward, according to ChannelAdvisor. “ “I don’t want anybody to think this is just around the corner,” Bezos said of the drone plan. But that didn’t stop absolutely everyone from talking about it yesterday. They can keep talking. Amazon’s futuristic plan for robotic aircraft delivering goods in 30 minutes sounds too good to be true mostly because, well, it’s too good to be true.

The law is likely to be the easy part. As Bezos noted, it’s currently illegal to fly a bunch of autonomous drones around carrying packages. But the idea that approvals are really just 2 years away, as was implied is misleading at best. The FAA has been working on drone-related issues for a while now, and while the first approvals of some kind might be due in 2015, full-blown certification isn’t expected before 2020. Sure, Amazon can do testing over the next several years, but don’t get that finder ready to click “Prime Air” delivery just yet.

Amazon has spent billions on distribution centers that aren’t near your house. Let’s take at face value the idea you can receive an item under 5 pounds within 30 minutes so long as you’re within 10 miles of an Amazon facility. The distance represents a bit of a best-case scenario right now because it assumes the drone will be able to fly in a straight line, which is often going to be completely impossible due to terrain, obstacles like power lines, no-fly zones, other drones in the air, et al. But let’s just say that advances in battery life will allow these “octocopters” to eventually fly something close to a 10-mile radius from the home base.

That’s good news if you live in Carrollton, Texas, not far from Amazon’s 1.1 million square foot facility in nearby Coppell. But folks in downtown Dallas are likely to find themselves just out of range of the drones. Too bad there are 10 times as many people in Dallas as Carrollton. But that’s nothing compared to the situation in Florida, where both Tampa and St. Petersburg are tantalizingly across Tampa Bay from the Ruskin, Florida distribution center. Yet virtually the entirety of both cities will be out of range. This is to say nothing of California, where Amazon’s initial facilities will give it access to the relatively tiny cities of San Bernadino (213,000) and Tracy (85,000) put won’t have drones in range of Los Angeles, San Jose, San Francisco, or San Diego.

Of course, it’s possible the company will be able to build closer to population centers, but it has already invested in 52 fulfillment centers representing more than 40 million square feet of warehouse space. And a major part of the real-estate selection process has been to intentionally avoid expensive real estate close to major cities. Reversing course here to support drone delivery doesn’t make any business sense for several reasons.

One is that urban delivery will be nearly impossible. Let’s just assume drones get so good at flying themselves around that they can reliably avoid collisions with other drones and in reasonably clear air navigate the few miles from a warehouse to your home. Now, add the complexity of urban terrain to the mix. Drones will either run the risk of lots of traffic flying low or be forced into upper altitudes, where the winds promise to be treacherous. Even if they arrive at the destination, in much of the world, urban dwellers live in buildings where access is through a lobby. Your UPS driver either finds a way to get the package into the lobby or often doesn’t.

In the latter case, Amazon has resorted to all sorts of solutions involving drop-off lockers at 7-11 stores to help make it possible to pick up your package at a time its convenient to you. With the drone, what exactly is going to happen? Often you’ll be home, since you’ve requested 30-minute delivery. But the drone, unlike your UPS driver, can’t ring up to your apartment requesting access. The idea it can fly up to your balcony is intriguing in theory, but that requires balconies, which don’t exist in all that many apartments.

Then there is the reality that the drone, while speedy, can carry literally one package with that 5-pound limit. A human in a car, or an electric pedicab or any number of traffic-beating alternatives could carry more. They might not match the 30-minute result, but for how many items will that matter? And with Google, eBay and others working to perfect same-day delivery now, how many people will even be seeking a faster alternative by the time these drones theoretically take to the skies.

The other is that weather is going to ground the drones often. Part of what makes Amazon so amazing is that you log in, click a few buttons and within 2 days, items show up at your house. You don’t need to worry whether the nearest distribution center has the item very often, Amazon magically substitutes better shipping to get you things from farther away as needed. Basically, the whole thing just works.

Let’s say Amazon gets a distribution facility up and running close enough to Boston to reach the city and surrounding suburbs. You find yourself in need of some cold medicine and just don’t want to go out to get it. Logging on to Amazon, you learn that Prime Air is grounded because a Noreaster is blowing through with high winds and a chance of snow. Far-fetched? Hardly. These tiny aircraft are going to be asked to carry what amounts to a substantial payload and will need to have a failure rate on deliveries of fewer than 1 in 1000. They can’t be dropping packages en route or crashing on the way. Drones can do amazing things, but these will be un-piloted aircraft with eight rotors atop them capable of doing more than a little damage should things go wrong. When conditions are shaky, the drones will stay in the warehouse.

The bottom line is that this might happen someday, but not someday soon. On Twitter, Semil Shah asked, “Is PrimeAir a joke, a stunt, just a PR move, or drawing out the skeptics?” Clearly, as a PR move, it worked fantastically well. As for drawing out the skeptics, consider them drawn. Bezos plays the long game better than anyone. He invests for the next decade when most CEOs can barely manage for next quarter. For that, he deserves a lot of credit. But it’s fair to note that the drone story and the 60 Minutes interview have come on the heels of lots of negative publicity for the company about how it treats its workers. The good news for those workers is that they are unlikely to be replaced by flying robots anytime soon. source: http://www.forbes.com