Regulations, customer acceptance, and cost will all determine whether the industry reaches its potential to disrupt global logistics or remains limited to isolated applications. Volume has grown dramatically in recent years, but the path ahead is not yet clear. We are at a critical time in the drone delivery industry. Currently, Part 107 pilots need to apply to the FAA for waivers to do any of these things, and now you do not need a waiver to do them, as long as you follow the new rules. That may present some challenges, since other innovative delivery options, including electric cars, autonomous cars, and ground robots, will continue to decrease in cost as they mature. CostĬonsumers will favor deliveries with the lowest cost if all other factors are equal. (The remaining 27 percent were ambivalent.) Adoption is likely to differ across neighborhoods depending on a variety of factors, including population density, geographic location, and local weather conditions.

2 Nearly 60 percent of respondents said they would use a drone-delivery service today if it were available in their area, compared to only 16 percent who said they would not use the service-a ratio of 3.5 adopters for every non-adopter. We conducted a survey of over 4,500 people across six countries and found that most viewed drone delivery in a highly favorable light. Gaining the public’s trust and acceptance of drone delivery is essential, and the early indications are positive. Regulations also determine airworthiness requirements for drones, and the guidelines could potentially increase costs and delay at-scale operations. For example, regulations may require one operator for each drone or allow a single operator to control a dozen or more drones-and this choice is significant, since the operator-drone ratio is one of the most important cost drivers. All of these factors can have a large impact on costs. Regulations dictate the type of operations allowed, including parameters related to geographic areas and airspace, times of day, and the conditions required for flight. Ultimately, the regulatory environment will determine the scale and scope of drone-delivery operations. While the progress for drone delivery has been substantial, we believe that three catalysts will determine the sector’s trajectory going forward. With such relatively low barriers to entry, over 100 companies currently compete in this segment. Compared to commercial aviation, drone delivery is less capital intensive because of the smaller aircraft sizes and commercially available technology. These and other drone-delivery companies have received more than $1 billion in disclosed funding over the past 10 years, contributing to the industry’s strong growth. Leading companies in the space include Antwork, Flytrex, Manna, Matternet, Skyports, Swoop Aero, Wing, and Zipline, to name a few. Today’s drone-deliveries cover a broad range of goods: from vaccines, medical supplies, and blood transfusions, to pizza, burgers, and sushi, to electronics, to toothpaste.

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