If Autonomous Drone Delivery Takes Off

Zoe Leavitt
Pro Journo Davos 2017
8 min readJan 22, 2017

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January 31, 2027

NEW YORK CITY — They look like owls, perched on the street lamp at the end of this quiet cul-de-sac. The dark shapes look against the sky, until every so often one of them rears upward, unfurls a set of wings, and whirrs nearly silently away.

These shapes are drones, which today carry everything from taco shells to toilet paper into American homes on a daily basis. Their docking stations, as described above, have popped up in neighborhoods across the country to support them. In data released earlier this year, the Federal Aviation Administration (FAA) revealed that 80 percent of all e-commerce purchases (over 50 percent of all purchases made in the U.S.) are today delivered nearly instantly by drones.

And as private companies expand their drone-delivery networks across our skies, they’re also reshaping our buildings and sidewalks. Early on, one of the most significant problems for drone deliveries was not faulty technology or safety but scale. Think of a delivery truck: It fulfill hundreds of orders at a time, traveling house to house on a route optimized by algorithms to use the least amount of fuel, even avoiding left-hand turns.

Drones, on the other hand, can carry only one or two items at a time. Sending them back to a centralized warehouse between each trip would be highly inefficient, so Amazon, Google and other companies now support vast webs of drone resupply stations, attached to skyscrapers, clinging to lampposts and even blooming out of artificial pine trees like the cell towers of yesterday. These stations are stocked with the most commonly purchased items in their districts — things like home goods, personal care items and fresh produce — and the drones quickly shuttle back and forth dozens of times a day. With that problem solved, there was little to bar to drone delivery. In 2016, Amazon disclosed that 86 percent of its sales were of items weighing less than 5 pounds and therefore suitable to be carried.

Amazon, which has long followed the strategy of patenting early and often, filed for intellectual property protection for several such hub systems as early as 2015 and 2016. It designed plans for docking stations that could be attached to street lamps or skyscrapers, landing pads on trucks and even airborne warehouses.

Amazon patent granted Apr. 5, 2016: Airborne Fulfillment Center Utilizing Unmanned Aerial Vehicles for Item Delivery
Amazon patent granted Dec. 27, 2016: Multi-Use Unmanned Aerial Vehicle Docking Station

“In these patents, we can see Amazon had a fairly well-thought-out drone strategy much earlier than most people realized,” said Scott Rasmussen, senior analyst at AirborneInsights, an aviation publication. “Of course, there were little explosions of hype around some of the most eye-catching drawings one by one, but Amazon was really thinking about it very holistically.”

In late 2016 and early 2017, automotive giants also joined the experiments in drone development. Mercedes-Benz partnered with drone startup Matternet to design a concept for a “Vision Van,” a vehicle stocked with goods that could serve as a mobile mini-warehouse and launch point for delivery drones. Its parent company, Daimler, followed up by leading a $17 million investment in Starship Technologies, which produces ground-based, autonomous drones.

A Slurpee from the skies?

Since biblical times, humans have dreamed of manna falling from heaven. It took a few thousand years, but the first drone deliveries actually focused on carting calories through the skies. Several companies began piloting drone deliveries around the same time. Surprisingly, it was not Amazon but the convenience chain 7-Eleven — not typically considered a pioneer in innovation — that was the first to complete a commercial drone delivery in the U.S., in July 2016, when it worked with drone startup Flirtey to fly sandwiches and Slurpees (the 7-Eleven branded frozen soda drinks) to a customer’s home in Reno, Nevada. In September 2016, Google worked with Chipotle to send burritos by drone on the Virginia Tech campus, and in October, frozen yogurt chain Orange Leaf tested drone deliveries in Michigan.

In December 2016, Amazon completed its first drone trial, delivering a customer’s order by drone in Cambridge, England, within 13 minutes of ordering. Meanwhile, startup Matternet used drones to deliver medicines in Haiti and other areas without critical infrastructure.

Amazon patent granted Apr, 30, 2015: Unmanned Aerial Vehicle Delivery System

Political debate around the world

When Amazon chose the U.K. for its first drone launch, the country offered a more attractive testing ground than the U.S., due to restrictive regulations instituted by the Obama administration that required each drone to remain in sight of its pilot, while companies had to maintain one pilot per drone. In part, these regulations aimed to protect employment in the trucking sector, which had reached a 10-year high of over 1.4 million.

“We see, again and again, these technologies attacking the jobs of less-educated workers,” said Marissa Silver, a consultant who advises companies on automation matters. “The trucking industry has been through a roller coaster over the past 20 years. First, employment plummeted during the 2008 recession, then it jumped up, and then started to slide again toward 2020.”

Regulations loosened under the Trump administration, with Secretary of Transportation Elaine Chao a strong supporter of autonomous vehicle development. Uber, Amazon, Google, Facebook and other Silicon Valley leaders lobbied hard for decreased regulation of self-driving cars and autonomous drones. They worried that drone laws would be determined state by state, in a piecemeal fashion, leading to a spaghetti soup of regulations that would make it hard for companies to set up large-scale systems. But in December 2017, the government established a federal system where companies could apply for autonomous drone delivery permits, the first batch of which were granted just a few weeks later.

The end of the store

Since that historic Slurpee delivery, drone delivery has exploded, affecting the entire retail, advertising and food and beverage sectors. Brick-and-mortar stores and shopping malls have seen a significant decline as people increasingly choose to buy via mobile for delivery. As recently as 2016, roughly 90 percent of shopping still took place in stores, but that figure is now less than 50 percent.

Amazon patent granted Jan. 3, 2017: Delivery of Packages by Unmanned Aerial Vehicles

Even something as simple as buying four or five shirts, trying them on at home and returning the ones you didn’t like is no longer necessary. A number of higher-end stores like Nordstrom now offer drones that wait for you to try on items and then take back any you don’t like.

The meal kit industry, which suffered a blow after early U.S. sector leader Blue Apron’s collapse in 2021, has boomed. Why waste time with weekly grocery shopping when you can just order each night’s ingredients on demand by drone? At the same time, ownership of infrequently used items has declined. Startups like Rentro and Keyless let members order tool kits or snow shovels for a few hours, sending drones to deliver and return the items. And to accommodate frequent drone visits, some housing developments are starting to design units with special “drone doors,” or retractable windows set into the roof, with small platforms on which the drone can land and then drop its packages through the window. Houses are increasingly built with mailboxes on the roof instead of the front door.

Since such a significant share of shopping now takes place on the spot, advertisers have had to change their strategies, too. “It’s no use anymore showing someone an ad for something they might need next week,” said Cleo Tillers, CEO of marketing agency Orate. “It’s got to be something they need at their door within the hour, or else they’ll forget.”

Amazon patent granted Oct. 4, 2016: Human Interaction With Unmanned Aerial Vehicles

“We recommend product bundling and upsells with drone purchases,” said Gary Gleeson, founder of retail consulting company CoreMarketer. “Say a woman orders a $200 dress. We just throw in a $250 one in the package along with it, which of course she’s not obligated to buy, but she can see the difference in quality. Maybe she decides to upgrade from the $200. Or someone orders some kids’ clothes — we can ‘bundle’ that with some age-appropriate toys, things we can see are relevant based on the user’s shopping history, and once the kid sees those toys flying in through the window, it’s going to be hard for parents to return them.”

What do Zac Efron’s house and the Grand Canyon have in common?

Drones can’t fly everywhere, of course. The Federal Aviation Administration has issued over 200 “no-fly” protections to sites of national interest, as well as to individuals who can prove they have “significant reason” to be concerned about drone invasions, such as celebrities or high-profile politicians. This has become a mark of pride in some circles, with some comparing a personal “no-fly” protection to earning a verified Twitter account.

Some say these mini no-fly zones only exacerbate inequality, with exposure to drones just one more negative aspect of modern-day lifestyles that the rich push on to the poor.

“The buzzing, the drones swooping overhead — these are things people wealthy enough to live in closed communities never have to deal with,” said Marissa Key, who leads a low-income housing advocacy group. “They’re so much more convenient, and time after time, people show they’re willing to give up privacy for convenience. But at some point, we should ask ourselves, How much is too much?”

What hope for the resistance?

Drones do sometimes generate anger. Major drone users like Wal-Mart, CVS, Amazon and Target have all developed unique drone defense systems, many of which gently retaliate when people on the ground shoot or throw things.

“A few dozen times a year, we’ll see a foamer,” said Craig Matthews, who manages Wal-Mart’s drone protection software. If one of Wal-Mart’s drones senses a projectile approaching, it can swerve to avoid it, sense the source of the projectile (i.e., the human thrower) and shoot a thick spray of foam in his or her direction. Matthews said the foam is to prevent a secondary attack, but many say the resulting humiliation is probably a reason, too.

“I wouldn’t recommend using our drones for target practice,” Matthews said. “These little guys are here to stay.”

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Life, love and soup dumplings. Covering retail and food tech at CB Insights and in my weekly newsletter CPG Insights