Google vs. Amazon -- Who Will Win the Drone Delivery Wars?
NEW YORK (TheStreet) -- Google (GOOG - Get Report) (GOOGL - Get Report)and Amazon (AMZN - Get Report) may be playing nice for now as they work together to make drone delivery a reality. But if and when drones get approved to make mass deliveries, the two tech giants will likely find themselves in a dogfight.
Both Google and Amazon want to use drones to deliver goods more efficiently, but both are up against strict regulations from the Federal Aviation Administration, which has been making it somewhat difficult for drone delivery to become a reality in the U.S. The most frustrating regulation for Google and Amazon is one that requires drones to be in the direct line of sight of its operators, which would make mass drone delivery essentially impossible.
Both Amazon and Google have responded to the FAA, requesting changes to these regulations.
Amazon Vice President of Global Policy Paul Misener spoke at a congressional hearing in June to convince the FAA to amend its regulations. Google submitted acomment to the FAA earlier this month, delineating what it sees as a practical solution for safe drone delivery.
As the two companies struggle to make headway with the FAA, they are are also working in other ways to forward drone delivery. They are part of a group of more than 15 companies called the Small UAV Coalition, which "advocates for law and policy changes to permit the operation of small unmanned aerial vehicles (UAVs) beyond the line-of-sight, with varying degrees of autonomy, for commercial, consumer, recreational and philanthropic purposes."
Through this coalition, these companies are working with NASA to develop a safe air-traffic system for drones. But as Amazon and Google work with NASA and others to forward drone delivery, they are essentially partnering to further a future rivalry.
If (or once) drone delivery becomes a reality, Google and Amazon will be battling it out to become the master of drone delivery.
The path for Amazon is slightly clearer than for Google simply because Amazon is already known for its delivery innovation.
"For Amazon, this is just another step to them creating an online experience that can deliver products to consumers as quickly and easily as possible," said Jason Caine, retail and consumer goods sector lead at Millward Brown Digital.
Google, on the other hand, is newer to the e-commerce arena, testing the waters with buy buttons and Google Express. In a comment to the FAA, Google made it clear that it wanted to use drones to deliver "relatively low weight/time sensitive goods." Perhaps Google would wind up functioning almost like a UPS of drones, as an independent drone delivery network for retailers. Amazon, on the other hand, would likely use drones solely to deliver for its own products and sellers.
When it comes to leading an industry, often the first-to-market player has the upper hand. But with Amazon and Google, it's not quite clear who takes the spot of first-to-market.
Amazon has certainly been more vocal about its drone efforts with Amazon Prime Air. Amazon CEO Jeff Bezos first announced the project on 60 Minutes in 2013, and the company has since been heavily testing drone delivery in the United States, the United Kingdom, Israel and Canada.
"Our growing team continues to conduct flight tests on rapidly improving designs," said Amazon spokesperson Kristen Kish. "Testing is going well, and we are very pleased with the R&D progress it has enabled. Putting Prime Air into service will take some time, but we will deploy when we have the regulatory support needed to realize our vision."
Google, on the other hand, has been much more tight-lipped about its drone experiments through Project Wing. When asked for an update on the project, Google spokesperson Courtney Hohne responded, "We submitted comments to the FAA's proposed rules and look forward to working with regulators and the aviation community to integrate small UAVs into the airspace."
Google first started thinking about the potential of drone delivery back in 2011 and originally thought of using drones to deliver defibrillators to heart attack victims. That one use case expanded, and in 2014, Google completed its first drone delivery to an actual consumer, sending goods to farmers in Queensland, Australia.
Google's drone delivers goods in Australia in 2014.
With both companies deep into testing, and anxiously waiting for regulations to catch up to technology, experts are split on who is better positioned to be the leader in drone delivery.
"Amazon is ahead in the drone race in terms of consumer perception and brand awareness," said Dave Parro, Walker Sands' retail technology practice lead. "If drones were to become legal tomorrow, Amazon would have the advantage because their technology is obviously ready and they seem very eager to get it launched and have the whole infrastructure in place to execute on that vision."
Plus, Google is just not as big of an e-commerce player as Amazon is, Parro said. "I don't think Google is the place consumers go for orders and fast delivery." Though he added that could certainly change down the line as Google puts more energy into its commerce efforts.
E-commerce aside, though, Google may have certain advantages here that Amazon lacks based on its existing products.
"Google might be a little better positioned because Google has already been doing a lot of work with Google Maps and self-driving car technology," said Cornell University Associate Dean Vishal Gaur. "Amazon is not as far invested into these technologies as Google is."
But with the FAA still doling out plenty of roadblocks, it's hard to say who will ultimately have the upper hand. "When it finally rolls out, they'll probably be pretty equal in terms of their ability to launch drones for e-commerce purposes," Parro said.
In order to get that reality, though, Google and Amazon will have to put their rivalry aside for a bit, Parro added. "They realize they can both benefit from drones, so they're finding out that they may have to work together. If they try to do it on their own, it may not happen."
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