Amazon has chosen India as the testing grounds for Amazon Prime Air, its new scheme to use drones to deliver products purchased on its website.
According to the Economic Times, the U.S. company plans to use unmanned aerial vehicles for deliveries in Mumbai and Bangalore. One of the sources ET talked to said that the new Amazon drone delivery system may begin as early as Diwali, a Hindu festival of lights that starts in late October or early November and traditionally sees an uptick in retail spending.
Amazon is currently vying with Flipkart, a Singaporean company that is the largest online retailer in India, for control of the Indian market. However, that is not why the U.S. based company chose India as the testing ground for drone deliveries. Rather, India was chosen because it lacks the more strident regulations on commerical drone usage found in other countries. According to the news article, commercial and civilian UAV operators in India do not need to obtain permits from India’s Directorate General of Civil Aviation.
In addition, Amazon maintains warehouses in both Mumbai and Bangalore. This will allow Amazon to deliver products to customers living in these cities incredibly quickly. According to the ET article, select customers in Mumbai and Bangalore will receive some of Amazon’s top selling products like books in as little as 90 minutes to 3 hours. Amazon’s ultimate goal for Prime Air is to be able to deliver products in as little as 30 minutes.
It’s worth noting that the ET report is based on two unnamed (presumably Amazon) sources, and that Amazon itself refused to confirm or deny their comments. Other sources have disputed the ET story. For example, BGR News said its sources inside Amazon India claim that Prime Air will not be launched in India anytime soon, and in fact indicated that a 2015 start may represent an overly ambitious timeline.
There’s good reason to believe them. After all, despite the lack of government restrictions in India, Prime Air would still face a number of challenges getting off the ground. Losing communication with the drones or other technical mishaps would cost Amazon dearly if a drone crashed, possibly injuring people and/or damaging property in the process. The fallout from such an incident would not be limited to India but would in fact almost certainly doom Amazon’s larger ambitions to launch Prime Air in its other markets as well.
Amazon first unveiled the idea for its Prime Air service in a video (see below) released in December 2013. Its ultimate goal is to use it in other markets, especially the United States.
However, even if the company figures out the technical challenges, it still faces immense obstacles to introducing the service in the U.S. market. Most notably, the U.S. Federal Aviation Administration has imposed strict regulations on the use of unmanned aircraft in the United States. According to the FAA’s website: “You may not fly a UAS [unmanned aircraft system] for commercial purposes by claiming that you’re operating according to the Model Aircraft guidelines (below 400 feet, 3 miles from an airport, away from populated areas.) Commercial operations are only authorized on a case-by-case basis. A commercial flight requires a certified aircraft, a licensed pilot and operating approval. To date, only one operation has met these criteria, using Insitu’s ScanEagle, and authorization was limited to the Arctic.”
This should be deeply troubling for Amazon. The United States is Amazon’s largest market. Its international operations account for just 40 percent of all sales. Moreover, despite heavy investments abroad in markets like China in recent years, Amazon’s growth in North America continues to outpace its international growth.