Amazon Drones Move To 500 Cities. It May Not Work

By Douglas A. McIntyre Published Aug 20, 10:34AM EDT

Quick Read

Amazon Prime Air will expand drone delivery sixfold to 500 locations by 2026, promising 30-minute deliveries of groceries, electronics, and cosmetics.
AMZN faces FAA safety concerns, neighborhood noise complaints, and privacy risks that could undermine its ambitious drone rollout.
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Amazon Drones Move To 500 Cities. It May Not Work — © Shutterstock

Amazon (NASDAQ: AMZN | AMZN Price Prediction) announced that its drone service will serve 500 locations, one of the biggest shifts in the package delivery industry. The idea that trucks and people are taken largely out of the equation could completely change the dynamics and probably finance

The company said, “Prime Air delivers millions of items in as fast as 30 minutes and will reach communities with tens of millions of customers by year-end.” The service will be in place by the end of 2026. It will serve about six times as many locations as it does today.

The service is also described as “ultra-fast,” which means 30 minutes in many cases. Amazon says most deliveries will be groceries, electronics, and cosmetics. This makes sense because none of them are heavy.

The service is currently in Arizona, Florida, Kansas, Louisiana, Michigan, Nebraska, and Texas. Amazon will add Georgia, Ohio, Illinois, Idaho, and New York.

Amazon said the service is already operating at an astonishing level. David Carbon, vice president of Amazon Prime Air, commented, “We’ve already delivered hundreds of thousands of packages to customers by drone this year.” Amazon also provided a map of the cities it serves and those it will serve later this year.

In theory, it eliminates truck fuel costs, truck costs, driver wages, and road delays. However, Amazon did not mention the challenges it faces.

The FAA has asked questions about drone delivery. Low-flying planes around airports could be endangered. Drones can fly at 60 miles per hour and up to 400 feet high. They can carry packages as heavy as five pounds. In other words, they are not tiny.

Two other challenges come to mind. First, the drones are not silent. They will be heard from the ground by people not getting deliveries. And there is the problem of privacy. Anyone watching carefully will be able to see where a package is delivered. This brings with it the risk of thieves, although this is a problem with truck-delivered packages as well.

Amazon’s announcement had nothing but good news. But, that is not entirely the case.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.