Whether we like it or not, drones are here to stay. A recent study by the Association for Unmanned Vehicle Systems International (AUVSI) predicted that the drone industry is set to have a US$ 100 billion economic impact. This means that drones are soon going to be integrated across key industry verticals and present a massive opportunity to businesses – especially e-commerce companies. But before you decide to jump onto the bandwagon, it’s worth exploring the following pros and cons…

90-91 Drone Delivery_2

Advantages

Better for the environment: using battery-powered drones to slowly replace conventional modes of transport can help significantly reduce fuel consumption and large emissions.

Establish your position as a market leader: any company that succeeds in implementing drone delivery will be seen as the innovator in the industry and will prove to be a disruptive market force. This is particularly true for companies operating within traditional industry sectors such transportation, oil & gas and telecommunications, where the potential for drones is massive and any inroads made in this regard will be revolutionary.

Cost effective: not only are drones energy-efficient, they are also cost-effective. Although the initial investment might be steep, the long-term savings are substantial. In fact, RobotEnomics’s Colin Lewis suggested that drones could help Amazon bring their cost down to US$2/shipment – in comparison to the current US$2-US$8 price range.

Speedy and more accurate delivery: when Amazon announced its plans to invest in drones, they suggested that they would be able to drop packages off to customers in 30 minutes or less. If this is truly achievable, it could transform the world of delivery! The same study on robotenomics.com highlights that Amazon’s one Prime Air drone could potentially make 30 deliveries in a 15 hour window (at maximum efficiency levels).

New job opportunities: this is definitely a double-edged sword – and hence it is something that goes across both sides of the argument. While using drones eliminates several layers of jobs such as delivery personnel, truck drivers and so on, it also creates a wide range of opportunities such as monitors, controllers and security personnel.

Gain a competitive advantage: many critics have argued that Amazon’s announcement on drone delivery was a smart way to intimidate competition and give them something serious to think about. The number of companies that are already offering same-day delivery has sky rocketed in the last couple of years, so to secure a competitive advantage, companies will need to think out of the box, and that’s exactly what Amazon is doing.

Disadvantages

Lack of privacy and serious security concerns: it is very likely that delivery drones will employ GPS tracking technology to be able to locate and deliver products accurately. In fact, it might be the case that they go a step further and use cameras to navigate through their surroundings. If video is not an option, there will need to be other identification mechanisms (such as biometric scanning or pin codes) to ensure delivery to the correct person. The question then arises: how does all this confidential information get stored and used? Companies will have to implement stringent laws to protect the privacy of their customers.

Global aviation laws: several countries around the world such as Australia, France, Canada and Germany have legal permits to allow the use of commercial drones. However, across the rest of the world, there is no legislation that safeguards the interests of customers, suppliers and other stakeholders. Moreover, as drones gain popularity, there is a requirement for a universal law that can govern airspaces these drones operate in, and ensure that they aren’t being intrusive. The possibility of realising the full potential of drone technology will largely depend on how quickly these regulations are put in place.

Injuries, mishaps and technical difficulties: federal authorities in many countries require formal training before the operation of drones can be permitted. And, rightly so. Several experiments in the field have proven that there is a high possibility of errors, which could lead to damages or severe injuries. Wind is another factor to consider.

Loss of employment: it is obvious why using drones has the potential to put hundreds of people out of jobs. While we argue that it will also generate new jobs, many of these will require skilled labour – this could be a huge setback for many countries.

Rushika Bhatia Editor

Rushika Bhatia is one of the region’s leading commentators on business and current affairs issues. She is the Editor of SME Advisor magazine - the flagship title of CPI Business. She is passionate about infographics – with special emphasis on data, research and statistics. Rushika has a Bachelor’s Degree from Indiana University, USA and is also CIMA qualified.

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