What is a UAV?
UAVs or Unmanned Aerial Vehicles, more commonly referred to as drones, have been in development since the early 20th century . Originally intended for military uses such as carrying and detonating explosives remotely, a wave of civil and commercial UAVs have garnered significant attention in recent years. Though the original form of UAV is often similar to the large Predator drone used by militaries across the world  modern civilian UAVs actually share far more similarities with the quad-copter design recently popularised by Chinese firm DJI . A comparison is shown below.
Civilian UAVs can be used for a variety of purposes ranging from filming from a unique vantage point to racing them for sport. However, over the last few years the properties of drones have caught the attention of many large companies looking to increase autonomy and therefore efficiency in their systems.
What can commercial UAVs do?
Modern UAV prototypes intended for commercial use are similar in form to the civilian quad-copter variant.
One of the most popular suggestions for their use in the commercial sector is focused around providing an autonomous delivery service. The distribution process has been consistently modernised, with innovation in warehouse storage systems, packaging and many other areas. However, currently all deliveries to the consumer’s address, whether business or personal are made either by hand, or are transported by a human. This often involves someone driving from the depot to the address and, in order to increase the efficiency of this process, carrying packages for delivery to multiple addresses in one day.
The commercial UAV is the chance for major innovation in the delivery sector. One proposals that could be the most revolutionary involves the use of drones to deliver small packages, most often to individuals, an exceptionally short time after them placing the order, possibly within thirty minutes . The plan is that any customers within a 10 to 15 mile radius of the local depot could place an order online and request for it to be delivered by drone. The items, provided they are small enough to be carried by the drone, are selected from the warehouse and moved to the end of a conveyor belt where the drone picks the package up. Next the UAV makes its way to the customers delivery location, possibly directed by signals sent from a landing pad of some form. Finally, the drone lands in the requested location, releases the package and returns to the depot. This would theoretically require no human intervention in the delivery process, reduce traffic in highly populated areas and increase efficiency of a multitude of companies in a variety of sectors around the globe.
However, there is also the possibility for other commercial areas to make use of UAVs. One such example would be the use of drones by emergency services for search and rescue. These drones would differ slightly from the commercial UAVs used as they would require some human interaction in order to identify the target at the specified location, this has been the approach tested by the Devon and Cornwall police using heat sensitive cameras . Using several of these at one time would allow for a significantly larger area to be scanned in less time, as well as doing so on a smaller budget than would be require to maintain and control a helicopter. This method can also be applied in order to improve the security level of major events with a team of coordinated UAVs able to cover large areas.
The same process used by profit driven delivery services could also be implemented by charities that aim to deliver aid into disaster areas. Particularly after earthquakes or landslides many areas can be almost impossible to reach by land and people can be trapped in inaccessible locations. Drones carrying water or first aid supplies could be deployed and piloted in order to increase the efficiency of aid efforts in these areas . This may prove particularly useful in countries which do not have the same level of transport infrastructure in the developing world.
Monitoring and Regulation:
Another possible area for innovation in the use of drones to monitor and, in some cases regulate, environmental areas of interest. One of the most simple proposals involves fitting a UAV with specialised pollution monitoring equipment to keep a record of the air quality across large cities. This could be used to autonomously issue pollution warnings in poorly regulated areas. Another suggestion that has a potentially larger impact is the use of drones as crop dusters in large agricultural spaces. For both of these areas these UAVs could be fully automated once collected calibrated and would cut labour costs significantly .
So what’s stopping them?
Although the potential of commercial UAVs has been widely publicised there have also been significant concerns raised about safety, security and privacy. One of the most pressing issues that has been raised involves the regulation of drone flights in high risk areas, such as in close proximity to airports or crowded airspace in general. For example the FAA has reported that ‘over a 5 month period there were 583 separate drone related incidents’ . It is likely that all of these incidents were in part caused by human error and that automation may be able to solve this, however, a fleet of completely automated UAVs would need to be monitored and guaranteed not to malfunction to ensure human safety. In the UK any use of UAVs for commercial purposes must be applied for and approved by the Civil Aviation Authority  and this may be extremely difficult to acquire for companies attempting employ an automated drone service. However, these issues could be overcome with careful preparation and testing combined with strict airspace monitoring around congested areas. In fact, in an interview with the Washington Post Missy Cummings, a leading drone researcher, suggested that the ‘technical issues have been solved’ but that the limiting factor was now ‘socio-technical’ .
The difficulty of monitoring the purpose of individual UAVs has raised security concerns. Drones have historically been used in military attacks and the possibility of drones being used to carry explosives into highly populated areas is a problem for security services. This problem would be exacerbated significantly if a large number of UAVs were being operated for delivery of monitoring services as it would be almost impossible to identify the drones purpose efficiently. In order to prevent this all commercial UAVs would need to be tracked and remotely controlled on demand.
The drones would also need to be tracked to prevent human interaction. In the case of automated delivery drones it would be plausible for the drone to be interfered with and the contents of the delivery, or the drone itself, to be stolen. These issues have been raised several times, and though protection laws can be implemented in an attempt to prevent this, it is notable that the largest companies developing UAVs for this purpose declined to comment when questioned about their solutions . This is likely to be the largest barrier as it may prove impossible to prevent all human interference with drones with significant government legislation and enforcement.
Who are the big innovators?
Though commercial UAVs could impact a large array of industry sectors there have been a few particular companies that have lead the way in drone innovation.
Amazon Prime Air:
The most famous example is the Amazon Prime Air service announced in 2013 . The proposal centred around the use of small UAVs to deliver light packages, less than five pounds, in under 30 minutes. A year later it was reported that Amazon had been developing their 8th and 9th prototypes and had applied to the FAA for testing . In December of 2016 the company announced that it had completed it’s first successful, fully autonomous, drone delivery of ‘a TV streaming stick and bag of popcorn’ to a customer involved in the private UK trial . Currently Amazon is aiming for more widespread availability of the drone delivery service in 2018. One of the most important factors that is currently driving Amazon’s innovation in this area is the fact that they already have an installed user base for Amazon Prime of 54 million people in the US alone . This is one hurdle that smaller companies may struggle with. Additionally, due to the size of the company it has been able to strike a deal with the Civil Aviation Authority for testing of of UAVs without line-of-sight . The development and progress that Amazon has made in the commercial UAV field has been vast in recent years and it may prove to be potentially extremely profitable for both them, and the companies that can follow in their footsteps.
Project Wing – X:
Funded via the X branch of Google, Project Wing is focused on working on automated vehicles that could deliver everything from consumer goods to emergency supplies . Since the first test flight in 2014 Project Wing has worked in conjunction with the FAA at Virginia Tech to gather data on unmanned UAVs. However, due to it’s wider focus this is a project very much in it’s infancy, unlike Prime Air. Though very little official information has been released it has been stated that development is geared toward enabling a ‘network of airspace service providers to safely offer access to this airspace to anyone’ . This is the most important element of Project Wing as if a standard of commercial UAVs could be developed, and officially regulated, it could then be licensed to a variety of companies. The most recent prototypes shown can fly up to 400 feet in the air and use a pulley system to lower goods to ground level in order to avoid the dangers of landing. If these were also fitted with tracking and collision avoidance technology that had been rigorously tested, then these drones may become the standard transport for commercial UAVs.
UAVAir Drone Training:
A smaller example of a company that has capitalised on the innovation in the commercial drone sector is UAVAir. With the use of UAVs increasing in a variety of sectors there has been a dramatic increase in the regulations and qualifications required. UAVAir offers courses in drone control to professionals or individuals that may need to monitor or remotely control drones. This is less applicable to delivery drones, which are planned to be completely automated, however for emergency services, surveillance companies or any system that may require human involvement this training and certification will be mandatory. By establishing a brand early to supply this service to early adopters UAVAir, and other such firms, have put themselves in prime position to establish key business agreements with major companies, should commercial UAVs find widespread use.
What are the next steps?
There are several competences that will be required in order to bring commercial UAV technology to market. These range from optimising the drop off process, to increasing range, to establishing regulations that ensure safe drone usage.
The drop off process is one of the shortest parts of an automated delivery, however it has also been proved to be one of the most complex to develop. It has been suggested that the Amazon Prime Air UAV will require a landing pad, with a unique ID, that can directly communicate with the drone making the delivery. Although Amazon has a large installed user base it may prove difficult to convince individuals to buy a separate pad in order to receive deliveries, especially when it will need to be placed in a ‘suitable’ location. Amazon will need to be very explicit with who the service can be provided to when it rolls out and how/where they will need to set up the drop point. Development will also be needed to improve the fuel cells and reduce weight in order to increase the range UAVs.
Project Wing has a different approach that uses a wire to lower the package so that the drone itself never has to land, reducing the likelihood of direct collisions.
This would remove the need for individuals to purchase landing pads, which would be significantly easier for one time deliveries, such as fast food. However, there is still a high risk of collisions, particular attention will need to be paid to the area underneath the drone as the package is lowered. However, these are similar to the kind of issues faced, and overcome, by Tesla with their automated car technology, so it is not impossible.
One additional step that all companies planning to use the technology will need to go through is applying for the correct licenses, as well as making use of governmental regulations to protect both the drones and any packages they may carry. The UK government is currently in a consultation process on drone regulation until the middle of 2017 . For example, companies applying to use UAVs that have a camera attached will have to balance this with the Data Protection Act. However, without a camera it may be difficult to prosecute persons that may cause damage to, or steal from, a drone. It is likely that the largest companies in the sector will have to set a standard in this regard that the rest can follow. However, gaining the trust of the general public may prove difficult with such a potentially controversial technology.
Who is the competition?
As with any emerging business sector there will be significant competition for market places. However, most of the largest companies mentioned above have mostly carved out their own niche in the market, with Amazon focusing mostly on offering a specialised delivery service to their existing or potential customers for example. The most pressing competition for these drone delivery companies currently comes from firms offering an alternative service.
Project Wing is focused on producing a cheap and reliable standard for commercial UAVs, however it to faces competition from individual firms. It is likely that smaller delivery companies, such as independent fast food outlets will use the system, however, unless it is universally accepted as a standard, as other Google services like Google maps have, then other companies are likely to launch their own alternatives. For example, DHL has been investing in an automated drone delivery system they have named the Parcelcopter . Using a slightly different system than has been proposed by Amazon DHL would use a set of small Packstations, shown below, in highly populated areas that would store a large number of parcels that could be delivered in one drop-off. The UAVs would then deliver the packages to individuals homes as efficiently as possible. Needless to say that competition such as DHL will have to overcome the same challenges as anyone else so it is presently complex to judge their threat to Amazon or Project Wing.
Clearly there will also be a degree of competition from more traditional delivery or surveillance services. Companies like Royal Mail may attempt to adapt should drone delivery become the norm however it is likely that if this is the case, more traditional services will be disrupted.
Who will this disrupt?
Should commercial UAVs become the most reliable and efficient means of transport for package delivery then competitors will have to adapt or be overtaken. Shown below is a graphic illustrating the difference in price and time to deliver between the proposed delivery methods.
If this situation were to be realised then services such as UPS Ground would see a significant drop in sales, provided Amazon Prime Air were able to offer a comparable level of security. However, there will still be some kind of need for other delivery services. For example, it is likely that for the foreseeable future commercial UAVs will not be able to carry larger or heavier packages, these will still be delivered using more traditional means. Having said that, there can be no doubt that there will still be a detrimental impact on the market. Amazon is Royal Mail’s largest commercial client and currently accounts for 6% of their parcels and even back in 2014 they stated were ‘suffering from “intensifying competition” from the likes of Amazon’ .
There will also be some more niche industry areas that may be affected by commercial UAV use. For example, cell tower inspections which are currently done by hand could be completed more efficiently with the use of a drone so companies offering these services will need to adapt. Additionally as the availability of drones to the general public increases there is the possibility that smaller, more local businesses may be effected. Innovative startups such as SkyCatch are offering UAV hire on a opex, pay for what you need model . These have become popular for some companies that provide mapping, survey or photography services and so though this may itself disrupt traditional outlets, it also offers a fast and easy way to adapt to the use of commercial UAVs.
Fad or the future?
Over the next decade commercial UAVs have the potential to revolutionise a range of market sectors, as well as disrupt some of the largest companies in the industry. Many, particularly in the delivery sector, will have to adapt quickly in order to not be left behind. However, as the use of drones becomes more prevalent and the general public become more at ease with their presence there is likely to be a new range of innovative startups that will take advantage of their unique properties, whether in delivery, surveillance or even the training and hire of drone pilots. The potential to fully automate the final leg of delivery and reduce the reliance on infrastructure, particularly in the developing world, could also rapidly increase economic growth globally. Though commercial UAVs may seem like a fad now, it may not be too long before the quiet hum of a drone dropping off your latest online order is an everyday occurrence of the future.
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