A Market To Unlock The Skies For Trade
From Trespassing to Trading - How An Industry Can Find Its Economic Wings
We were promised a future of flying cars and effortless drone delivery, but so far, it's been a case of "jam tomorrow, never jam today." Why?
The drone industry's addiction to government intervention and regulation rather than embracing the power of the market. It's time to shake off the shackles of bureaucracy and recognize that the key to unlocking our skies lies not with career regulators but with the millions of decentralized air rights owners ready to open their airspace - for a price.
Traffic congestion is estimated to cost the global economy $1.4 trillion annually. The advancements in electric vertical take-off and landing (eVTOL) aircraft and drone technology are attempting to bring a congestion-free world.
Morgan Stanley predicts the global Urban Air Mobility market will reach $1 trillion by 2040. This growth is driven by technological advancements, growing investments in electric aviation, and increasing public and government interest in new mobility solutions.
Drones can play a transformative role in reshaping urban cargo delivery, medical emergency responses, food delivery, and last-mile passenger transport. Companies like Amazon, Walmart, and Doordash are experimenting with drone delivery to reduce last-mile delivery times and costs. According to Ark Invest, the industry will be worth $450 billion. Millions of flights have already been made by drone companies trespassing in private airspace to deliver mediocre coffee and doughnuts.
One of the biggest reasons the drone industry is lagging is that it ignores private property rights, looks for governments to expropriate private property, and ignores market forces. If we have learnt anything over the years, this centralized strategy of telling us how to use our property or, worse still, trying to take it from us does not work out well - decentralization can solve it.
Trespassing
In addition to privacy issues, drones also trespass, which can be both civil and criminal. Examples include flying into, remaining in, or on private property without the owner's permission, entering or remaining in restricted areas and engaging in behaviour disturbing the peace, such as hovering.
In 2024, a landmark judgment in the UK found that continuing to fly a drone over private property amounted to trespass. A UK High Court decision in the UK granted an injunction preventing drones from flying over private property without the explicit consent of the air rights owners.
In Texas, flying a drone over someone else's property can be considered criminal trespass. Common law claims for drone trespass include invasion of privacy, nuisance, and trespass.
Regulators Tea Party
Governments worldwide are drafting policies to regulate urban air mobility, with the European Union Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA) working on various certifications, box-ticking exercises, proposals that undermine private property air rights, and captured market participants. And we wonder why we haven’t got the flying future we want?!
Leaving how we manage our skies to career regulators and a small group of vested interests will continue to get us nowhere fast. Luckily, many of the planet’s countries have a sensible approach to airspace ownership, which is a counter to aggressive regulations.
Land and homeowners own the rights to the airspace above land and buildings. These far-flung decentralized market participants can decide how they want to use this valuable resource. With recent technological developments, accessing and utilizing these assets with low fees has become possible.
Many drone companies ignore air rights ownership and are hoping for government intervention to circumvent the freedom and the rights of property owners, which are both constitutional and legislative.
The only way the billions of dollars invested into the (non-military) drone industry is to find an exit is by embracing freedom and the market. It may appear contrary not to seek the blessings of a centralized body, but if this problem, which is a lack of drones at scale, is not boiled down to its essence, it will not be solved, and its essence is freedom. Private air rights property owner permit access to their property.
What is the next logical step if you invested in rail carriages in the 1800s, but they had no tracks? It’s to invest in the tracks to unlock the power of all the carriages.
Millions of air rights owners will welcome drones into their airspace for the right incentive; this incentive is monetary. I have personally spoken to many of them, and recent surveys confirm that most air rights owners want to control their airspace and want to be paid if they are to allow access to it. This is one of the reasons we started to build SkyTrade.
Currently, some drone companies are flying medicine and other friendly goods to soften the blow of their trespass in private airspace, but it’s just not enough incentive. Hoping that people in the current drone delivery areas will be rolled over because of flying aspirin or a first aid kit is cynical at best.
What can be seen is these air rights owners are primarily in politically disenfranchised locations where their knowledge of air rights is less than that of air rights owners in bigger cities.
When the right to use your property meets the rights of commercial drones, there is only one rightful winner. There is no mention of drones in the constitution.
The beauty of the market is that those with air rights decide the price for their air rights and when they want the drones to transit. This means the more incentivized air rights owners are, the more open the skies are for drones. The more air rights access, in turn, will use market forces to reduce the access fees for drones, and the market has done its job.
Drone companies who ignore air rights and property rights are slowing themselves down. Calling for additional regulation will not speed them up. It’s time to make the market, and that market is decentralized.
Thanks for reading, and you can contact me at jonathan@sky.trade
