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Jun 12, 2019

Uber wants your next Big Mac to be delivered by drone

Uber Eats app

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On an overcast Monday in May, I joined a group in a parking lot behind a San Diego McDonald’s to witness the future of food delivery. In the centre of a large area cordoned off with yellow crime-scene tape sat a four-foot-long, six-armed AR200 drone with a custom-designed payload box.

I’d come to watch Uber Elevate, the aerial arm of the US$72 billion ride-­sharing service, test food delivery by drone. The original plan was to observe the dramatic transport of a Big Mac, chicken McNuggets, and two orders of fries a half-mile away, beyond the line of sight, to the entrance of the Viejas Arena at San Diego State University. But with the wind clocking in at 26 knots — classified as a “strong breeze” on the Beaufort scale and above the limits set by the manufacturer — that trip was cancelled. Instead the ­burger-bearing drone lurched, rose 25 feet, hovered for about 60 seconds, and slowly descended.

At a time when it’s impossible to buy a house that doesn’t have a well-produced drone preview, it was an inauspicious debut for one of Uber Elevate’s key new programs. Google already has approval from the Federal Aviation Administration to make unmanned commercial deliveries as part of its Wing program in Blacksburg, Va. This month, Amazon.com Inc. (AMZN.O) unveiled a revolutionary drone it hopes will deliver household goods.

But the team behind Uber Elevate — which is still waiting on FAA approval — believes its drone service is the future of food delivery. The company anticipates that commercial business will begin this summer in San Diego. It plans to start pricing then, consistent with Uber Eats delivery pricing, at the start: In San Diego, those fees can range up to US$8.50.

Parent company Uber Technologies Inc. (UBER.N) has had a turbulent year, losing US$1 billion in the first quarter after its widely hyped initial public offering. But Uber Eats has been a bright spot, reporting revenue of US$1.5 billion in 2018, almost 150 per cent higher than a year earlier. “What’s convinced me on drone delivery is to see how Uber Eats has grown,” says Eric Allison, head of Uber Elevate and a veteran of Larry Page’s flying car ­company Zee Aero. “Our customers want selection, quality, and ­efficiency — all areas that improve with drone delivery.”

Over the next four years, the food-delivery business is estimated to increase 12 per cent a year, to US$76 billion in 2022, says investment firm Cowen Inc. Uber isn’t disclosing the cost of drone testing, but according to filings in advance of its IPO, Uber Advanced Technologies Group, which includes Uber Elevate and the company’s self-driving-car unit, spent about US$457 million on research and development in 2018. 

San Diego has been a hotbed of drone research, in part because of the military presence there and because — the weather on the test morning notwithstanding—the weather is reliably sunny and calm. In 2018, the FAA selected San Diego as one of 10 locations to test commercial drones, and the city partnered with Uber. 

“To envision where we are in drone technology, imagine that this is two years before the introduction of cell phones,” says Stanley Maloy, head of innovation at San Diego State University. “The next step is a brick-size phone to carry around. And it’s a decade before we see smartphones.”

The city is already testing drones for blood delivery in emergency response situations, as well as laser-equipped drones that can monitor soil composition for major California industries such as wine cultivation and almond growing.

Uber Elevate has no immediate plans to send drones to your home. Safety issues are a sticking point: A midair collision could send the devices — and their burgers — onto unsuspecting pedestrians below. Noise pollution from whirring rotors is another concern. Instead, drones will fly to designated safe landing zones where waiting couriers will pick up deliveries to bring to your door. Drones might also land on the roof of a parked Uber car outfitted with a QR code, which will transport the food to the last leg to its destination.

The company is betting that customers will demand drones for the time savings and eventually, price savings. For a delivery 1.5 miles away, ground transportation averages 21 minutes; drones can make the trip in about seven minutes. Uber Elevate is planning to unveil its own customized drone this year, reaching speeds up to 70 mph. The company is also bullish on vertical takeoff — vertical loading vehicles for people — and predicts you’ll be tapping an Uber Air button on your smartphone by 2023.

Kate Fraser, head of policy at Uber Elevate and an FAA veteran, believes drone food delivery will take at least three years to be implemented in a handful of markets. In those cities, the company will use its cache of data to target optimal landing pads. “We can do demand modeling to decide if a drop-off place is every six or eight blocks,” she says.

Luke Fischer, head of flight operations at Uber Elevate, anticipates that in 10 years, drone delivery will be prevalent enough to change restaurant kitchens. He envisions a time when drones will roll out on conveyor belts with scannable codes from commissary kitchens. “Like the drive-through, except the drone-through,” he says.

For most of the process, Uber has been working with McDonald’s. Along with testing flight paths, the team has spent months designing packages that keep burgers intact, French fries hot, and ice cream cold.

A partner was added to the pilot program in May, when San Diego restaurant Juniper & Ivy signed on to deliver its popular US$21 off-the-menu double-patty burger. (It makes only 10 per night and doesn’t currently deliver.) Owner Michael Rosen is debating whether he’ll use the restaurant kitchen or send a cook off-site to prepare them. “To send an employee off-site would be a money loser for us,” he concedes. “But to team up with Uber is publicity we will pay for.”