Fooled ‘em again! Why Amazon Prime Air, like Ginger, won’t fly

by Bob Sullivan on December 2, 2013

Amazon has published a demo video on its site.

Amazon has published a demo video on its site.

Jeff Bezos is a lot of things, but when I see him talk, I feel the same way I do about a charming magician.  Now I know why.  He’s convinced some very important people that drones will soon be dropping Amazon packages out of the sky, only 30 minutes after consumers order them.

Non-stop coverage of “Amazon Prime Air” reminds me a lot of the news stories many journalists were suckered into writing about Ginger more than a decade ago, also thanks in part to that dreamy look Bezos’ eyes. Bezos was an early investor and pitchman. Ginger, you probably don’t recall, was going to change the way Americans got to work. Cities were going to be rebuilt around it.

Ginger turned into the Segway, Dean Kamen’s pretty neat super-scooter.  The Segway’s chief use today: cheesy tours for people who don’t want to walk between Washington D.C.’s great monuments.

I’d expect the same from Amazon’s drones.  I’m not saying they won’t fly; sure they will.  Drones are real. Maybe Amazon may deliver inter-office mail around Seattle with them. But Amazon is facing some very big business problems — for one, Bloomberg says it’s losing more than $3 billion annually on delivery costs — and this slight of hand may be just the thing Bezos needs to distract concerned investors for a while.

Let’s start with the obvious: drones crash.  Perhaps, in five years, the technology will be so advanced that they only crash once every 10,000 hours of flight.  In a major city, that would be one crash per day. Also, these things would be dropping 5-pound packages all over the place.  Onto who? Or what windshield? Or what cat?

Here’s the cold reality, delivered by Jeff Lowe, general manager of Asian Sky Group, a Hong Kong-based aviation consulting company, to Bloomberg.

You’d have to make it idiot-proof,” Lowe said. “From a height, a 5-pound load hitting anything is going to be fairly destructive, so that can never happen. The first time it does, the FAA will ground all these drones and they will never fly again.”

Amazon is notoriously bad at breaking out numbers, so the best we can do is speculate. But let’s start with a mental exercise. All those Amazon packages you see being carted around by brown trucks in your neighborhood? Picture one-third of them as payload on a drone in the sky.  It gets crowded pretty quickly.  I feel an Alfred Hitchcock movie coming on.  And while Bezos says drones are greener than trucks, I’m not willing to concede that point.  Drones and their pesky flightworthy weight limits sound like one-package-per-trip gadgets to me.  They can only cover a 10-mile radius, as he described on 60 Minutes.  Back-and-forth-and-back-and-forth in those 10-mile radius areas?  Is that really greener than a truck carrying 500 packages?  We’ll see.

Now, as for the numbers: Amazon right now has 89 distribution centers. Let’s round it up to 100. So Amazon Air Prime can operate in 100 10-mile radius circles around the U.S. Sure, you could cover a lot of population with that — if your distribution centers were in places like midtown Manhattan. They aren’t. The warehouses are in places with cheap land, outside cities.  OK, you move them closer to cities. That’s expensive.

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Finally, I’m picturing I Love Lucy and the chocolate conveyor belt as these drones fly in and out of these distribution centers. Amazon won’t say how many Prime members it has, but this quarter, it did say it added “millions” of new prime members.  Let’s guess that’s 2 million, and guess that’s a nice 25 percent increase….wildly guestimating that Amazon has 10 million Prime members (I bet that’s low).  Say they each order one Air Prime package per month (I bet that’s low).  That’s 100 million drone flights, or 270,000 on an average day. Could we agree 5 percent of those would fly in a big city like New York? With all that rounding, we’re talking about 13,500 drone flights around New York.  How many drones would you need? How many of them would crash into each other when order picking in an Amazon warehouse?

I don’t mean to ruin the fun, but outside of a few Segway-like novelty applications, I don’t believe Prime Air will get far off the ground.  I think you’ll see 3-D printers in people’s homes printing up Amazon orders on the spot, Star Trek “replicator” style, sooner than we’ll see a sky full of Amazon drones.  I know for certain you will first see other sensible day-of delivery ideas, like Amazon lockers at 7-Eleven stores.

Amazon is making a lot of enemies — book publishers, worker rights advocates, and soon, shipping companies.  Meanwhile, please recall that with all this frenetic activity, Amazon doesn’t make any money, while it does Wal-mart some small businesses.  Magic tricks are fun, but don’t be fooled by them.

 

 

{ 2 comments… read them below or add one }

c David Pylyp December 2, 2013 at 9:21 pm

Bet you’re a glass always empty kinda guy, great blog following. No revenue. While this Amazon promoter who has everyone so mesmerized with his HOCUM is living large. Glad everyone with a fresh idea filters it thru every negative Nellie he can find.

Ps star treks communicator looks very similar to the Motorola flip phone.

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Mick December 3, 2013 at 2:55 am

I think it’s reasonable to expect drones buzzing through the skies within the next 10-15 years delivering small, quick deliveries such as documents or a sandwich, or even an order of Chinese food. But as much as I love Amazon, I just don’t see it as a game-changer for them. I think Bob’s right… Amazon’s whole approach to these has Segway-repeat written all over it. When delivery drones do hit the skies, I hope they’re reliable and trustworthy. These drones look clunky and high-maintenance.

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