Drones are starting to deliver packages in some parts of America. But can drone deliveries be a viable business?
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Bloomberg is skeptical. From an editorial out this morning:
The biggest hurdle is that drones will be making point-to-point deliveries, which is the quickest but most inefficient way to take packages to homes or businesses.
Despite the hype in the e-commerce market, it’s unlikely the sky will be studded with packages coming in for a landing on doorsteps.
What Bloomberg is missing is drone delivery’s massive advantage in labor costs.
The average UPS driver makes $22 an hour and does about 120 deliveries a day. Even if he’s very efficient and can finish in 8 hours, that’s still $1.47/delivery in labor costs alone.
Compare that to a drone. This sleek model from DJI is a mere $300 on Amazon. If it could make even 1 delivery per hour, 8 hours a day for a year before it wears out, that’s just $0.10 a delivery.
And remember, you don’t have to buy a huge truck, fill a gas tank, or pay benefits to a driver!
Drones may be able to do far fewer deliveries each than a driver can. But drones cost so little, you can afford to buy a swarm of them and still save money.
What’s more, drone delivery makes the most sense where drivers are least efficient: suburban and rural areas. Here, it takes drivers much longer to get to the next stop than in dense cities.
But it’s a perfect environment for drones — lots of space to land!
In a world of ever cheaper hardware, labor costs overwhelm almost everything else. If you can cut out labor and still get the job done, it’s hard to lose.
I look forward to having packages land on my roof. I just hope the porch pirates don’t send their own drones to steal them!
What do you think of drone delivery? Leave a comment at the bottom and let me know!
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