Name: Brainstorm Tech 2023: Are Drones Ready To Deliver To Your Doorstep?
Uploaded: 2023-07-12
Duration: 13 min 16 s
Description: Brainstorm Tech 2023: Are Drones Ready To Deliver To Your Doorstep?

Brainstorm Tech 2023: Are Drones Ready To Deliver To Your Doorstep? 

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Andreas Raptopoulos, Founder and CEO, Matternet In conversation with: Jessica Mathews, FORTUNE 

Are Drones Ready To Deliver To Your Doorstep? 

Hi, everybody. Hope you enjoyed your lunches. Welcome back. So we're going to dive into a really exciting topic. Now, that's been buzzing for quite some time and that's drone delivery. I think we've all imagined a future where our packages are really and truly finally delivered by drones and it's actually slowly but surely becoming a reality. So before we get too carried away with visions of drone swarms, let's get some expert insights on what's real and what's not joining us today is an inventor and an entrepreneur who has taken the drone industry by storm. His company recently achieved a remarkable milestone by securing the industry's first ever FAA type certification for commercial drones with its entire fleet. Now, officially air work. Please join me in welcoming Andreas Rata Poli, the visionary founder of matter net, a leading company in commercial drone delivery systems. And we are really thrilled to have Andreas here to shed light on the possibilities and some of the challenges as well that are ahead from regulatory hurdles, potential benefits. So here to interview him is Fortune's Jessica Matthews. Please welcome them both. Andreas. Good to see you today. Thanks for coming out to talk about drones. It's great to be here. Thank you. Yeah. So I'm going to ask you about matter net in particular, but let's start with a little bit of the big picture here. So about 10 years ago, Jeff Bezos promised that we would be getting our Amazon packages delivered by drone. Obviously, that isn't happened, that hasn't happened yet. So why, why is that not happening? Why can't we go ahead and get things delivered to our doorstep by drone? Yes. For, for your own delivery to happen, you really need to have infrastructure that can support this type of new layer of transportation of scale. So here in the United States, the FAA and in Europe, Aasa and then other agencies around the world have been working to put together the framework that would allow their own delivery to happen safely at scale in the national airspace system. So um in the US, we've been, I think making strides at creating the right regulatory framework. There is two fundamental pieces to it. The first is how do you make sure that an aircraft is air worthy and can fly safely over people in international airspace system, avoiding other uses of the airspace, et cetera. And that program has been that that whole regulatory framework has become the tax certification framework. And ma net was the first company in September of 2052. And today, the only company that has gone through this tax certification and we have a net worthy aircraft that's safe and reliable to fly in the National Air Space System here in the US upscale. So we're going to get to the type certification in a second. But let's talk a little bit more about what matter net does specifically. So you've been building out a medical supply and health care drone delivery operation for more than 10 years and you partner with UPS and as of earlier, this air Ame flight, tell us about your drone M two and its capabilities. Right. Right. So we build an autonomous aircraft that is able to transport lightweight packages. We build our systems to transport packages of up to 2 kg, £4.5 in distances of up to 20 kilometers, 12 miles. Why did we choose that problem? Most medical items are lightweight and then when you look at Amazon's traffic, the number that they quoted is that 86% of what they ship is below £5. Right. So what we see every day is already quite lightweight and then within the logistics chain, the most inefficient part of delivery is last mile delivery. 80% of the last time the delivery market is in urban and suburban areas, right. So we decided early on to really focus on this problem of how do we solve. You would create the right technology start to transport these single packages very, very efficiently, right, at a fraction of the cost and energy of any other transportation system today. Right. So if you imagine what's happening today, right? I mean, I live in the Silicon Valley. Um If you know, I want a burger, I go on a doordash or an Uber Eats app. Right? And then somehow a burger appears on my doorstep, like 30 minutes later, it feels magical from a user experience viewpoint. But then we deploy a two ton car in a human to go out and shop something for us and then drive it through town, stopping at every stop sign, creating traffic to bring us that you know, less than £2 item. It doesn't make any sense, right? When you look at the environmental impact of that method of delivery, 20 to 30% of a city's carbon dioxide emissions are coming from last mile delivery, right? So that's a problem that we have to fix. And that's why, you know, it makes sense to really figure out the right technology layer to complement the transportation methods that exist today. Our vision is that anything that is lightweight and urgent, you know, will be transported via the air as these types of systems become mainstream. And again, you know, we feel that this is going to be a layer of transportation, a layer of logistics that's going to be taken for granted by future generations, right? We got started by doing work in the humanitarian field. I remember our very first pilot in Bhutan in 2014, we're in the middle of this beautiful Pristine Valley and I take out my phone and I'm able to, you know, get the internet right and convert by email or access Wikipedia, right? 30 years ago, that was happening in science fiction, right? Drones are going to do the same thing for transportation. So, you know, give it enough time and it's going to happen, I think at different speeds at different parts of the world, right? This is going to become a new layer of technological capability that will be added to our cities, right? And also to rural areas and fix the problem of in inadequate access to critical goods such as medicine and also help people transact goods, transacting goods is one of the most basic things that we do every day. And that's a technology that will allow us to do that very, very efficiently and without taxing the environment. So I had the pleasure of visiting one of your drone sites out in Pittsburgh, California, which I will tell you is a very far Uber ride out of San Francisco um where all is net operating right now. Yeah. So we've been operating in Switzerland since 2017. In 2017, we became the first company globally to be authorized to fly over cities in Switzerland, transporting diagnostic specimens and medicine for hospital systems, initially in the city of Lugano and then Zurich. And in 2019, we came here to the US established a partnership with UPS. Currently, we are in our fourth year partnership with UPS and we established the first revenue generating operations in North Carolina. We're still operating for a hospital there and we've been transporting things like diagnostics and medicine, COVID vaccines. During COVID, we've also launched a program with UPS to deliver prescription drugs from a CBS store to a community in Florida. Um And you know, when you look at modern its progress, the way that we architected the company, right? Our focus is really how do we solve the technology and how do we make that this technology is best in class, very robust and can scale, right? And then our mission is to put it in the hands of these organizations that have that need to really scale. So, you know, we didn't chase metrics like number of deliveries or like we really chase complexity of operations and we wanted to solve for the most complex use cases like flying in the heart of Zurich. Today we're flying around is a 3.5 kilometer route over the center of Zurich. It's as complex as it gets as it gets when it comes to the safety case. And how do you perform these services safely many times a day? Right. And here in the US as well under the tax certification framework and also the operation certificates that people like UPS and flight carry, right? So we're really focused on creating the right technology stock for us to be scale. And now we're finding ourselves at this very interesting inflection point where, you know, especially since our type certification, we've been very active trying to figure out what are the right partnerships for us to really see this type of technology scaling, right? And when we talk about scale, you know, again, I live in the Silicon Valley, you know, I could imagine, I don't know, a fleet of, let's call it 250 to 500 you know, small aircraft flying, you know, in the Bay area, transporting goods every day, right. And you know, these places will be a high utilization and again, you know, they will be completely in the background, you won't see them or hear them, right. They will do their job autonomously just as the internet does each job autonomously of automatically of transporting these beats, right? We transporting atoms. So you talk a little bit about matter net inflection point that it's experiencing right now. Can you talk about the inflection point that the industry is experiencing at the FAA is getting closer to developing regulation for drones to fly? What's called loss, which is beyond visual line of sight. When can we expect that regulation to pass? And when can we, when can we expect drone companies to really be able to scale? Uh It's really hard to predict regulatory timelines we found from a um so I won't attempt it. I would say that, you know, we see the space scaling this decade, right? And um just a few weeks ago, there was a major milestone. I think the FAA has published four waivers from four different companies. Our partner ups fly forward is the applicant in one of the waivers to allow operational entities to fly beyond visual site in the US. Right? There is an expectation that in February of next year, they will the FAA will submit a notice for proposed rule making that will establish the beyond visual oxide rules in the right of way, we always fly in the lower part of the space up to 400 ft, right? So there's very little other traffic there, there is emergency helicopter services, there's police helicopters, et cetera. So you know, there is a system to deconflict towards those and have automatic deconfliction, right? So that's the next bit of regulation that really need to come into place for this space to scale. So already figured out that certification and air awareness already figured out operational certificates through the so called part 135 airline certificate that our partners are carrying. Can you explain what part 135 means? Yeah. So the it's it's the regulatory framework within an airline can operate a airworthy aircraft, right? So you know, a part 135 carrier may fly, I don't know Tesla aircraft every day to transport small, you know, packages between smaller airports. Let's say that's what our partner may fly does every day. And you know, under this framework, they can also operate our drones because they're very worthy. And you know, we as a manufacturer of the technology, we provide them with the operating manuals and the maintenance manuals and they build the right programs for them to be able to operate these types of systems safely at scale. Right. And then the regulator looks at, you know, the operator as having the authority to fly these systems and the responsibility to fly them safely. So these two things have been figured out and that's extremely important. And you know, the next big step is really figuring out how do we fly long distances autonomously, which is the beyond visualized type rules that are hopefully coming up very soon. So we're running out of time here. But before we go, I have to ask you about the big news in the Wall Street Journal last week that one of your board members, Mike Whittaker is expected to be the next nominee to lead the FAA and that could be announced as early as this week. Um So given your relationship with Mike, is there anything that you can any insight you can share with us about that? I think he's a really brilliant mind and a man of, I think the utmost integrity, he understands the space very well. He's been on our board since 2018. He's also served as the Chief Commercial Officer and Chief Operating Officer of Super Hyundai's Advanced Area mobility Program. Before that, he served in the FAA as deputy administrator and he was the chief officer. So I think he has a very good understanding of the issues and a good understanding of how can the us keep on executing on a strategy that will allow it to be at the forefront of this new technological wave that advanced area of mobility and drone delivery represents. Well, Andreas we're out of time. But thank you so much. It's a pleasure. Thank you.