UPS just beat out Amazon and Google to become America's first nationwide drone airline

  • The US Department of Transportation said Tuesday it granted its first full Part 135 certification for a drone airline to UPS
  • UPS currently conducts drone deliveries at a large hospital in Raleigh, North Carolina.
  • It will now be able to operate drones anywhere in the country — an industry first. 
  • Another drone operator — Wing, owned by Google's parent company Alphabet — also has Part 135 certification. But the scope of its operation is limited to Christiansburg, Virginia, about 210 miles southwest of the state capitol Richmond.

The US Department of Transportation said Tuesday it granted its first full Part 135 certification for a drone airline to UPS. 

Since March, UPS has made revenue-generating drone deliveries at the WakeMed hospital campus in Raleigh, North Carolina, in collaboration with the drone technology company Matternet. 

Now, UPS can deliver goods anywhere in the country — with the approval and cooperation of the Federal Aviation Administration. It's a major step for proving the worthiness of the highly regulated and much-hyped technology.

"This certification allows us to fly an unlimited number of drones and an unlimited number of flights with an unlimited number of remote operators," Bala Ganesh, who is the vice president of UPS's advanced technology group, told Business Insider. 

"The idea is that now we have the unlock to start scaling throughout the country," Ganesh added.

However, UPS isn't the first company to receive Part 135 certification.

Another drone operator — Wing, owned by Google's parent company Alphabet — also has the certification. But the scope of its operation is limited to a town called Christiansburg, Virginia.

In September, Wing announced that it would pilot deliveries of FedEx Express packages and Walgreens medicine and wellness goods to customers' homes in the Southwest Virginia town, about 210 miles away from the state capital Richmond. In recent years, companies ranging from Domino's to Amazon have made highly publicized pushes into drone delivery.

But no company has managed to establish a regular, revenue-generating business from the drones. UPS said in March that it was the first to do that. 

Your Amazon packages won't arrive by drone anytime soon

However, don't expect your Amazon packages or other deliveries to arrive via drone anytime soon. Ganesh at UPS said the weight limit for the Matternet drones currently in operation is five pounds.  

That's why UPS is currently working with hospitals and in healthcare industry — where there's already a clear use case for how drones can be economically beneficial.

"There's a lot of economic opportunity on these use cases, before we look at what consumers intuitively kind of think about," Ganesh told Business Insider.

"People just jump to 'when are we going to see coffee being delivered on the front yard?'" he added. "But to get to that kind of cost viability, it's going to take some time."

Instead, in the next few months, Ganesh said UPS's drone network will be expanding to more hospitals. Presently at WakeMed, UPS drones move lifesaving specimens, like blood or organ samples, from building to building in just over three minutes — a significant time-saver compared to moving these samples by car, which can take up to 30 minutes in traffic. 

However, UPS is testing B2C uses for drones in rural areas — where flying drones is more feasible and more cost-effective than in packed urban settings.

What's taking drones so long?

The financial drawbacks for implementing drones have hamstrung tech companies and retailers alike. That explains why a B2B setting — providing drones for hospitals — is where drones saw their first revenue-generating success in the US.

Elsewhere, the sluggishness in drone technology adoption is due partially to government regulation. The BBC reported in December that governments worldwide were worried about the potential for "rogue drone use" and the safety concerns that could stem from drones malfunctioning and falling from the sky.

But in May 2018, the Department of Transportation took a major step in better regulating the commercial use of drones, announcing that 10 state, local, and tribal governments were approved to work with private corporations to test drone technology. The North Carolina Department of Transportation, working with UPS and Matternet, is one of the participants, though UPS's involvement in the program was previously undisclosed.

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