Project Wing won’t be profitable in the U.S. for years, if it even takes off.
Project Wing, the drone delivery program piloted under Alphabet, the parent company of Google, wants to open a serious delivery service. Wing is a project of the search giant’s moonshot division, X, formerly called Google X, now a separate business under the Alphabet umbrella.
The idea, according to a report this week in the Wall Street Journal, is to create an online retail center called Wing Marketplace where orders will be delivered by drones on demand for a $6 fee. Former employees said the company met with Whole Foods, Domino’s and other restaurants, according to the Journal.
But if Wing is expected to eventually make money, the drone division will have to jump through a lot of hoops first. And that will take years — not only to get the technology right (autonomous aviation is dangerous) but also to write the laws that will make drone delivery legal (it’s not now). All meaning that, for the time being, Project Wing’s ambitions for a $6 on-demand drone delivery marketplace are all still very much a fantasy.
That has always been the point of Alphabet’s X division, but there’s been a marked shift in the company’s direction, especially under the watchful eye of CFO Ruth Porat. The Wall Street veteran has instituted tougher guidelines for spending and requiring shorter timelines for reaching profitability, according to a recent Businessweek article.
With drones, like cars, there’s no room for bad engineering. There’s more at stake with building a flying vehicle than designing, say, a smartwatch. If a drone falls from the sky, it can be deadly. If it’s hacked, it can be weaponized. Hit a building, bird or tree and the aircraft can shatter and lose control. Drones have to deliver to the correct place and not cause any damage when dropping cargo.
Right now it’s not clear the technology is ready. In October, researchers demonstrated how quickly a drone can be hacked and commandeered. Three weeks after GoPro brought its Karma drone to market in November, customers reported units were losing power and could drop from the sky. One of Facebook’s drones suffered a structural failure after its last public demonstration in July.
While Project Wing completed a burrito delivery with Chipotle to Virginia Tech students last September, a former employee told the Journal that the latest model hasn’t been able to complete more than 300 successful flights before something went wrong.
It’s not currently legal to fly drones out of the line of sight of the pilot or in densely populated areas, but the rules are still being written. This month, the FAA is expected to open the policymaking process to determine how drones will be allowed to fly over people, which will be key to legalize before drone delivery really takes off.
It takes years to craft new federal policies. The Google-affiliated drone project has lost a number of core members in the past two months, including its CEO, David Vos, as well as Sean Mullaney, Wing’s top commercial executive. The drone project is now under a hiring freeze, and some employees have been instructed to seek jobs elsewhere within Alphabet’s moonshot lab.
Vos previously represented Project Wing in FAA discussions and even co-chaired an agency task force on drones last year. It’s not clear who will take over representing the moonshot lab in the upcoming FAA regulatory discussions.
Delivering what, exactly?
Amazon is also racing to perfect its delivery drone technology. But whereas Amazon has an obvious use for delivery drones — shipping the millions of orders the online retail giant processes a day — Alphabet’s drone program doesn’t. So far, Project Wing has been trying to partner with other companies to test drone delivery solutions, like Chipotle, as well as with Starbucks, but as Bloomberg reported, the coffee company pulled out last month.
Google does have an online marketplace and ground delivery service, Google Express, that’s been active for the past two years. But retailers may be more hesitant to have their brand associated with a new and potentially dangerous technology, even if it is a cool idea.