Unleashing Our Potential - Transport Routes to Prosperity
Drones, Flying Cars and Automation
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How much money can we save on transportation costs if we remove the unnecessary and unhelpful impediments that hold us back? How many lives could we save? By using new and developing transportation systems, how much can we increase economic output by? When we add in low-altitude airspace that Unmanned Aerial Vehicle (UAV) operators need, the impact is immense.
The Struggle For (Non-Military) Drone Flight
Two key executives have departed from the Amazon drone delivery operation, highlighting the challenges the project faces. Jim Mullin, Prime Air's chief pilot, left Amazon last month, with Robert Dreer, responsible for Prime Air's test operations, leaving his role too. These departures coincide with Prime Air's struggle to transition into an operational service, a vision set over 10 years ago. There is no doubt Amazon is a long-term investor and has deep pockets to push forward, but over a decade with no commercial services is more than an Amazon problem, something systemic is going on.
What is holding the drones back? Let’s have a look at some of the economics of drone operators. In this example, Amazon could be any drone operator.
The model for this estimate assumes that Amazon will operate 30,000 to 40,000 drones and each drone will make 30 deliveries a day. When we see that the number of packages delivered by the unit is c.220 billion per year this does not seem out of reach.
Unit Delivery Costs
Using a 5-mile delivery with a 6-inch cubed package
Electric Car
We are assuming it is one package per driver the total costs are $9.50 and if the same driver takes 5 packages it drops to c.$1.60
Electric Van
Similar to the total cost for the same single package and driver the costs are $11 and if the van takes 100 packages it drops to c.$1.80.
Combustion Engine Van
The same package is $11.60 and if the driver delivers 100 packages the unit cost is c.$1.90.
Electric Drone
This is where things start to look really interesting. In the US Beyond Visual Line of Sight (BVLOS) regulation is not in place although the technology is available. Drones want to fly from point A to B and back again ‘as the crow flies’. If for example, 1 drone takes 1 single package and you need 1 drone observer and 1 person to fly the drone it’s $13.50 per package delivered. This is currently the requirement and it’s not great.
If we drop the amount of observers to 1 per 20 drones the cost comes down to c.$1.80 per package. Much better. But if we push this out to 1 observer per 100 autonomous drones with packages we are dropping the cost to $0.36 per package delivered, which is a staggering reduction of c. 80% compared to the costs for 100 packages in an electric van.
It is worth noting at this point the safety aspect, and what we have been conditioned to accept, and think regarding transportation, safety and growth. This is having a direct and negative effect on our ability to grow our transportation systems and economies.
Autonomous Vehicle Safety
Every day in the US there are c.100 fatalities and over 7,000 injuries due to car accidents. These are non-autonomous cars, the normal massive hunks of metal with people behind the wheels. Research has shown 94% of these incidents stem from human error. What if we removed the human?
Autonomous cars remain impervious to intoxication, drowsiness, or distraction. The problem with autonomous cars is they butt up against the same people who make all the errors when driving their non-autonomous cars.
Clearly, the use of automation in the realm of transportation can save lives. It removes the variable that does not adhere to the laws and regulations. Driverless cars are programmed to adhere to laws so they will comply, unlike their human counterparts.
If we extrapolate this to drones we can see why autonomous drones delivering packages from point A to point B and back again, which has been set and programmed is much safer than sending someone hurtling down streets and highways in creaking cars and defective scooters.
It’s curious then why we are so slow to accept this autonomous transportation revolution. It will save lives, increase the flow of goods and lower prices, all public policy goals.
In terms of drone delivery if people in communities had a vested interest, more than the simple convenience of their meal delivered slightly quicker this would help public acceptance of automation in transportation. Drones while they may appear more sci-fi than autonomous cars, can be the unlock to wider acceptance of automation for cars, both flying and ground-based.
It’s exciting that two driverless taxi services, Waymo and Cruise have been given permission to charge for rides in San Francisco now, so we are on moving along the right track.
Positive Developments
The Federal Aviation Administration (FAA) has recently accelerated the issuance of Beyond Visual Line of Sight (BVLOS) waivers, allowing limited advanced operations for data collection. Phoenix Air Unmanned, uAvionix, UPS Flight Forward, and Zipline have proposed exemptions for BVLOS operations.
Where will they fly, and within whose 3D airspace will they have permission to fly?
The Federal Aviation Administrations’ (FAA) Re-authorization Act has the potential outcome of expedited action from the FAA in outlining a Notice of Proposed Rulemaking (NPRM) concerning BVLOS drone operations at or below 400 feet. Congress approved the act on July 20, it awaits Senate consideration.
However, navigating the legislative processes complexities and addressing public feedback on diverse BVLOS technical, standard, and procedural matters suggests that the proposed regulations might not come to light for another 6 - 12 months.
David Boulter, the FAA's Associate Administrator for Aviation Safety, expressed the FAA's ambition to standardise exemptions for similar operations with similar risk levels, ultimately achieving the secure integration of drones as part of the National Airspace System (NAS). Although the drones must fly in airspace the Federal government do not own, which is controlled by the air rights holders, namely the landowners.
A new ‘Key Site’ is on the FAA's agenda, aiming to trial multiple drone operations under 400 feet in a specific location whose owner(s) have given permission for the drones to fly, with support from various service providers, which must be welcomed as a progressive step.
The FAA is encouraging innovation and working with industry, state, local, and tribal governments to realize the benefits of drones. - FAA
Safety For Commercial Drone Operators
Whether manned or unmanned aircraft, the FAA requires that all operators follow specific guidelines for the operations they request. They need a Part 135 certificate. This is so we can be sure the drone and its operator are safe to fly. It does not authorise where they can fly or in whose airspace it is legal to fly.
A part 135 Single-Pilot operator is authorised to employ only one pilot for all part 135 operations. A Single Pilot in Command certificate is a limited part 135 certificate, comprising one pilot in command and three second pilots in command. Restrictions apply to aircraft size and operational scope. A Basic operator certificate is constrained by operational size and scope, allowing a maximum of five pilots (including second in command) and five aircraft. A Standard operator holds an unrestricted certificate for size and scope but requires authorisation for each specific operation they wish to undertake.
The Billion Dollar Flying Car
Archer Aviation the electric Vertical Takeoff and Landing (eVTOL) aircraft company secured another $215 million in equity investment. The funding was from Stellantis, with backing from Boeing, United Airlines, and ARK Investment Management.
Archer has now amassed more than $1.1 billion in total funding. Their aircraft, Midnight, is engineered to accommodate a pilot and four passengers alongside luggage for journeys of 20 to 50 miles at speeds of up to 150 miles per hour. The aircraft employs six independent battery packs, each supporting a pair of electric engines.
Pending FAA approval, Archer aims to launch commercial operations in 2025. The company holds authorisation for testing and anticipates delivering its inaugural product to the U.S. Air Force by the end of this year or early next. The funds will be used for the refinement of the aircraft, associated technology and manufacturing and test facilities.
Everyday Drones
Drones have fantastic potential in all areas of logistics. One that we can see daily is food delivery. This is a business that has been notoriously hard to make money in for companies. Using the method of incentivising the supply side, juicing the demand and pushing the wheel to get the network effects moving. Now some of the delivery providers have slim profit margins but it still costs in the region of $6 - $9 for a delivery driver to scoot your food to you. The customer incentives have largely been replaced with more subtle and less valuable ones so a profit can be delivered.
By dropping the costs by over 80%, which using drones can do, and paying airspace transit fees for the use of airspace to the air rights holder, consumers and food providers will benefit in a very big way.
The drones need to be certified and safe to fly, which has had some setbacks but many of these problems appear to be solved, and the FAA is moving in this area. There were some early crashes, issues which have also been solved. The speed of granting certificates could be quicker no doubt, but there is forward momentum.
Large companies looking to do drone delivery have tried to petition the Federal government to give them private individuals low-altitude air rights and were told - no.
The federal government cannot give what they do not own. Drones can technically fly safely but drone programs are stalling. The problem they have is a lack of approved airspace, airspace which is owned and controlled by the landowners.
This problem is being solved by SkyTrades and it is the catalyst of change.