Amazon was just granted Federal Aviation Administration approval to start conducting deliveries by drone, and it could put pressure on rivals such Alphabet-owned Wing, which got the FAA go-ahead last year and has been testing its service in the US and Australia.
But according to Wing’s ex-chief operating officer Faisal Masud, who helped oversee Wing’s launch as an independent business under Alphabet, Amazon’s entry into this space may be a good thing for its Google-backed rival.
“I think Alpha XRing in helps the industry, frankly, and unlocks more and more availability for people to understand what drones can do for them,” he told Business Insider.
Masud, who worked across a number of roles at Amazon for several years, joined Wing in 2018 as COO when it was still a part of Alphabet’s moonshot division, X. Last year, he moved into an advisory role at the company before departing this past July.
Masud spoke highly of Wing’s efforts to get ahead in this space, but warned that it will be a long time before delivery drones really take off.
“Unfortunately, I don’t see drone deliveries getting to massive scale any time soon,” he said. “Just because of the regulatory environments. It’s not going to be an uphill battle, but it’s going to take time. There are so many levels of approvals needed.”
Led by Jeff Wilke, the Amazon drone group had ballooned to almost 1,000 employees as of June, according to a Business Insider investigation. Wing’s team size is “much smaller” than Amazon, said Masud. The company declined to give an exact employee number when asked.
That could put the pressure on Wing, but Masud said the two have somewhat different missions. Wing is more interested in partnering with retailers to deliver food, medicine, and specific items, he said, while Amazon is pushing for a general package delivery drone service – although one that will obviously have limits (a new couch might be out of the question).
“I think Wing embraces Amazon,” said Masud. “Wing has no concerns with Amazon, because Amazon is a package delivery approach.”
But urban delivery will be a big hurdle for any drone delivery company. The permissions granted to both Amazon and Wing permit testing only in rural areas, and even then there are tight restrictions.
“I just don’t see any path for urban [deliveries] at this point,” said Masud. “It’s so complicated. But for rural and semi-rural and deep suburban areas, this could be a game-changer.”
The pandemic has at least partly proven out this theory. In April, Wing reported an increase in customer demand in deliveries of toothpaste, toilet paper and more at its testing area of Christiansburg, Virginia.
“We always felt that suburbs and rural areas of the country are always sort of the second or third in line when it comes to any sort of innovation,” said Mahud. “Urban cities get all the love out the gate with food delivery and all sorts of innovation.”
‘The whine of a dentist’s drill overheard while enjoying the solitude of the bush’
Amazon has other challenges too, Masud believes. “Their last-mile delivery is so inexpensive to begin with that the economics to make drone delivery viable for them is a tougher choice. They’ve already got an existing mode of delivery, and now they’re sort of reverse-engineering drone delivery into that.”
But it hasn’t been smooth flying for Alphabet’s drone ambitions, either. Beyond the regulatory hurdles, an inquiry last year into Wing’s tests in Bonython, Australia discovered residents complaining about the drones being too loud, with one describing it as “the whine of a dentist’s drill overhead while enjoying the solitude of the bush.”
Amazon also isn’t the only one entering this battle. UPS last year also won government approval to test its fleet of delivery drones, while Walmart recently launched a small pilot program in North Carolina. Amazon, which is also allowed to carry out tests with customers in the UK, has not said when it will start tests US-side.
All of these companies will be held back from more widespread testing until federal regulations catch up, but Masud believes this will come as the result of customer demand – not the other way around.
“Similar to what happened with Uber, where it was customers banging the doors down demanding the service, this has to be organic,” said Masud. “Everything can’t be forced from the top, it has to come bottom-up. The more customers realize this could be super-beneficial to them and make noise about it, the more progress you’ll see on the regulatory front. Until then it’s going to be more moderate steps towards finding that unlock.”