Merchant Innovation

Amazon's Coming: One If By Bike, Two If By Air

Amazon has decided that getting the package to customers is half the fun if it can be done in half the time. On land, it's now testing bike deliveries in New York City—guaranteed delivery within an hour. (And guaranteed personal injury lawsuits within two hours.) As for flying in the Wild Blue Stock Option Yonder, Amazon has gotten tired of wrangling with U.S. regulators and is threatening to completely move its drone program—also designed to accelerate deliveries—overseas.

On land, Amazon's bike speed racer program is being called Amazon Prime Now, reports The Wall Street Journal, which observed bike messengers working for Amazon filing out of the back of a building on West 34th Street just steps from the Empire State Building.

"Amazon has been holding time trials with messengers from at least three courier services to pick the speediest and most careful for its delivery fleet, the person said. During the trials, messengers are given an address and told to bike there within the allotted time. Once they arrive, they are required to take a photograph of the building’s address and return to the ground floor of the Amazon building, which is referred to by bike messengers as the base, the person said," the story noted. "At the base, Amazon has built a lounge replete with foosball, pool and air hockey tables; an arcade; and other amenities for messengers hanging out between deliveries, the person said. Messengers are paid around $15 an hour and work eight-hour shifts."

Retail history does not look not kindly on this bike effort. Amazon invested in Kozmo.com, a one-hour delivery service that "flamed out" in 2001, the Journal pointed out.

Amazon has experience with the challenges of one-hour delivery service, having invested in Kozmo.com, a startup that expanded too quickly and flamed out in 2001. Then there's Domino's, which built its business around a pledge for 30-minute pizza delivery, only to have to kill that pledge after a more than $78 million jury verdict against the chain because of an accident caused by one of its delivery people rushing to make the deadline.

Perhaps it's much safer in the sky? Tired of the paperwork and delays imposed by U.S. regulators, Amazon is now saying—threatening?—that it's going to pull all of its research efforts out of the U.S..

Quoting from a letter sent to the U.S. Federal Aviation Administration on Sunday (Dec. 7) by Paul Misener, Amazon's VP for global public policy: "Without the ability to test outdoors in the United States soon, we will have no choice but to divert even more of our [drone] research and development resources abroad," the story said.

The FAA has effectively banned commercial drone use, including test flights, until it completes rules for unmanned aircraft in the next several years. Companies can apply for exceptions to the ban, but the process has been slow, the story noted.

Amazon already is doing drone tests near Cambridge, England and is seeking drone talent for tests in Tel Aviv, Israel. The story adds that Google has been testing drones in Australia.

Like the NYC bike trial, clones are an imperfect solution that could prove helpful in limited customer situations. Among the limits: drone battery life (the more and heavier the packages, the more the power drain); large apartment buildings; navigating electrical and communication wires; and dealing with the Journal described as "obstacles on the ground, such as dogs." (As mail delivery people can testify to, a pair of property-defending Doberman Pinschers can be fairly substantial obstacles. Two bites and it's bye-bye extremely expensive drone, let alone whatever yet-to-deliver packages it was holding.)

In the Misener FAA letter, it gave a good example of the kind of paperwork issues involved. He described a request to test the drones in a rural area near Amazon's Seattle headquarters. The FAA had insisted on Amazon pursuing an experimental certificate. Misener wrote that such certificates were designed for manned aircraft and likely wouldn’t "provide us with the flexibility we need or at the pace we need it."

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The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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