Google's (GOOGL) secretive research laboratory, Google X has been attempting to build a fleet of drones that can avoid earthbound traffic to deliver packages quickly as part of its “Project Wing.”
Google started working on drones in 2011 and admits that it would take much longer to develop a fleet capable of flying multiple deliveries per day.
The recent development pits Google against Amazon Inc. (AMZN) that announced its plans to use aerial delivery drones last year as part of the Prime Air service. Both the companies are consistently competing with each other for acquiring significant market share. Domino's Pizza Inc. (DPZ) also tested drones in 2013 for delivering pies.
Self-flying vehicles can open up completely new ways to move goods –- including alternatives that are economical, quicker, less wasteful and more finely tuned with the environment. Google also sees the technology as a way to deliver much required medicines and supplies in emergencies like natural disasters.
Commercial delivery drone use is, however, not permitted in the U.S. The Federal Aviation Administration (FAA) is looking to change that and in June allowed the first commercial drone flight over land—for energy giant BP PLC (BP) in Alaska. But the FAA is taking a cautious approach because the technology can be dangerous and raises privacy concerns.
The FAA said it is not considering autonomous drone delivery as of now, thereby putting brakes on Google's and Amazon's plans.
Commercial drone use by these companies face legal and pragmatic problems. The legality of operating drones within homeowners’ airspace and issues relating to insurance have been raised.
Earlier this year, Google’s researchers tested Project Wing iQueensland, Australia. The company tested drones with two farmers, who were delivered items including radios, dog treats and cattle vaccines.
In the coming year, Google will concentrate on the safety system of the drones, their navigation and issues related to mechanical trouble. Besides zeroing in on the exact delivery place, the drones will also be programmed to fly well-structured delivery paths. Issues related to noise, privacy and well-being of people will also be taken into account.
Google currently carries Zacks Rank #3 (Hold).
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