UPS is the first company in the nation to receive FAA approval to operate a commercial drone fleet.
Why it matters: It's a big step forward in the effort to safely integrate unmanned aircraft systems into the country's existing airspace, and will allow UPS to scale drone package delivery across the country.
The big picture: Unmanned aerial vehicles have the potential to transform our daily lives, but not until regulators can be sure they won't fall from the sky or crash into other aircraft.
- The Trump administration has taken steps to try to speed up the rollout of drone technology, including a series of pilot projects to demonstrate how they could be operated safely.
- UPS' approval comes after the company had already made 1,100 medical sample deliveries at a Raleigh, N.C., hospital under one such pilot program.
Details: The certification deems UPS' drones safe for flight, but individual flight paths and use cases must be approved.
- Importantly, the drones can fly beyond a pilot's visual line of sight, which hasn't been allowed until now.
- It also lets UPS drones fly at night and carry cargo that weighs more than 55 pounds.
- UPS said it will start by setting up a fleet of unmanned aircraft to deliver health supplies within medical campuses and eventually expand to deliver consumer packages in a few years.
- "It just gives us a lot of capabilities," CEO David Abney told the Wall Street Journal. "We're going to move ahead quickly and expand rapidly," he said. "It's not going to be a small operation."
- Within months, Abney said UPS could be using drones in 100 or more hospital complexes.
- The business case for drones is compelling, UPS tells Axios, because it replaces the need to contract with more costly same-day couriers.
- And customers like hospitals see value in fast drone delivery of lab specimens, for example, so they're willing to pay more for the service, UPS says.
Yes, but: Significant regulatory hurdles remain for UPS and other companies, including Amazon and Uber, that hope to win approval for their own drone fleets.
- Drones may not fly over urban areas under current FAA rules.
- FAA needs to define standards that would let authorities remotely identify drones.
The bottom line: Almost 6 years ago, Amazon CEO Jeff Bezos' pronouncement that drones would deliver packages to your door seemed like a silly pipe dream. Now, it appears to be taking off.