Industries have changed and evolved along with technology’s growth and increasing involvement in consumers’ lives. Due to the widespread availability of the Internet, businesses have switched from providing services mostly in-person to doing so mostly online. Online businesses now operate with lower overhead expenses, such as rent and employee salaries, than they did in the past.Although buying from online merchants is more convenient, the buyer will still have to pay for additional shipping and handling costs. Shipping and postage have stayed mostly unaltered over the past ten years, despite the fact that technology has disrupted a lot of businesses. Major online merchants continue to primarily use traditional postal service providers like USPS, UPS, and FedEx for shipment and handling. With Amazon Prime Air, Amazon has recently challenged the status quo. A drone delivery service called Amazon Prime Air plans to deliver packages in 30 minutes or less1. The software is still being developed and has not yet been used. Although drones have a significant financial and economic effect, the debut of commercial drone services has been delayed by Federal Aviation Administration (FAA) rules as well as privacy and safety concerns.
FAA rules have caused Amazon’s plans to introduce unmanned aerial delivery systems to be delayed. Drone usage is now authorised in the US for military, scientific, and leisure purposes. Drones used for study and enjoyment are not governed by the same laws as those used for warfare. Unmanned aerial vehicles (UAV) are now only permitted in populated areas up to a height of 400 feet in the United States. The FAA has not approved the commercial use of drones, which is currently prohibited. The FAA is hesitant to provide permits allowing businesses to test drone services within the United States because to worries about air space and ground safety. Due of its inability to conduct aerial delivery research within American borders, Amazon decided to test this novel technology outside of the United States. In 2016, successful trials were conducted in Cambridge, England. The FAA did grant Amazon authorization to test current drone models in 2015, but by that time the company had already begun testing in Canada. The FAA’s “line of sight” requirement is one of the primary obstacles to the usage of drones for commercial purposes. The point of deploying drones professionally, especially for deliveries, is defeated by this law, which compels a drone operator to always have the aircraft in their line of sight. The civil aviation ministry has significantly altered India’s new drone legislation following the government’s ban on drone imports. In reality, it has made it simpler for individuals to lawfully use tiny drones for non-commercial purposes. In accordance with the Drone (Amendment) Rules, 2022, which the government just unveiled, small to medium-sized drones weighing up to 2 kg may be flown for non-commercial reasons without the need for a remote pilot licence. According to the new government regulation, after receiving training from a DGCA-approved drone training institution, you are no longer needed to get a licence from the DGCA separately. After finishing the course, you will now receive a “Remote Pilot Certificate” from the DGCA-approved drone training centre itself, granting you the right to operate micro drones for profit.
How it faced economic Impact
Rapid technological advancement has given consumers access to cutting-edge goods at competitive rates. Historically, drone use had been restricted to the military due to their expensive cost and advanced technology. Consumers may, however, get drones for less than $100 because to economies of scale. Due of the technology’s accessibility, consumer companies like Amazon have considered deploying unmanned aerial vehicles for commerce. A 30-minute delivery window is promised by Amazon Prime Air for packages weighing up to 5 lbs. Google (GOOG) has developed flying drones for the delivery of medication to remote areas and environmental protection, in striking contrast to Amazon. The effect on the environment is likewise significant. Drones, which are powered by batteries, are less harmful to the environment than delivery vans. Many businesses might depend less on autos if delivery drones become widely used. The environment would benefit and many nations would be able to cut emissions, contributing to the achievement of emissions objectives set in various international accords. However, this would have a negative effect for vehicle manufacturers. Unquestionably, commercial drone use has negative economic effects. According to estimates, there is a $127 billion market for drones across a range of businesses. Notably, infrastructure and agriculture will be impacted by drone use for commercial purposes more so than commerce. Drone usage in agriculture is expected to successfully feed and hydrate plants while also reducing exposure to illnesses due to its capacity to cover broad regions. The incorporation of UAVs might generate more than 100,000 new employment on a macroeconomic level. Over a ten-year period, manufacturing employment and drone operators will make up the majority of the jobs generated by commercial drone use. The increased economic activity will also provide tax windfalls to the states. There is little doubt that the ramifications will benefit both businesses and customers. Directly benefited by the increase in incomes brought about by new jobs are consumers. Commercial drones will also enable businesses to save money by using more economical distribution, transportation, and inventory methods. By lowering prices, these cost savings may be transferred to the customer.
Despite the significant financial effects of drone use, many consumers, governments, and regulators think that authorised UAV use is harmful. 44 states now have their own regulations governing the use of drones for public, recreational, and commercial purposes. With the widespread deployment of drones, individuals’ worries about corporate and governmental data collecting are certain to grow. Many people think that Amazon’s drones, which use a camera and GPS to navigate delivery destinations, Additionally, Amazon and other businesses’ drone delivery systems may encounter logistical challenges. Traditional postal services continue to be responsible for lost or stolen items that were incurred during the delivery process. A drone, however, cannot guarantee error-free delivery in the absence of human oversight. Similar problems are certain to arise with delivery in large cities. It is impossible for an unmanned aerial vehicle to enter residential buildings inside the metropolitan skyscrapers. Aerial vehicles are more prevalent now than ever before, which raises threats for animals like birds in addition to logistical and privacy issues. According to the FAA, birds in the US are responsible for more than $1 billion in damage to aeroplanes.
Amazon has increased pressure on Congress and the FAA to change drone restrictions as a result of its ongoing testing and development of unmanned aerial vehicles. In addition to e-commerce giants like Amazon, other sectors like as agriculture, public safety, and disaster management would gain from the integration of drones into national airspace. In a more charitable vein, Google envisions using its drones to transport medical supplies and to save the environment. The economic effects of UAV integration include the creation of jobs and billion-dollar growth. Likewise, businesses reduced expenses by using more efficient distribution and transportation methods. Even with the obvious drawbacks, it is projected that the United States loses $10 billion in financial growth for every year that integration is postponed.