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Drone industry flies higher as COVID-19 fuels demand for remote services

July 13, 2020, 1:00 PM UTC

Online shoppers who want to order food and medical items from the local Walmart in Grand Forks, N.D., have a surprising new home delivery option. In addition to the usual in-store pickup or delivery by truck, a drone startup is offering to fly items straight to a customer’s backyard.

The airborne delivery network, run by Israeli drone startup Flytrex, is one of just a handful in the U.S. permitted to make crosstown commercial deliveries. The service kicked off in May after the company received approval from the Federal Aviation Administration, which regulates drones, a month earlier.

Lately, the FAA has been speeding up its approvals for services that may help during the COVID-19 pandemic. And home delivery that doesn’t require contact between a customer and a driver fits the bill.

“Because of COVID-19, the FAA has not lowered the bar on safety, but they’ve been working a lot faster,” says Yariv Bash, CEO of Flytrex, which is also delivering treats from Dairy Queen. “They’re really pushing things ahead a lot faster.”

Over the past few years, the commercial drone industry has been slowly expanding in the U.S. as the Federal Aviation Administration allows more flights. Most of those approvals have gone to services like deliveries, the inspection of buildings and structures, and moviemaking.

Since the pandemic started, some companies have talked about using drones to help fight the spread of the virus directly, like spraying disinfectants on outdoor stadiums or scanning crowds for infected people using thermal imaging. But those ideas have yet to gain much momentum.

“COVID of course caught everyone by surprise, but what we’ve seen is an acceleration of drone adoption trends,” says Jan Gasparic, director of strategic partnerships at leading drone maker DJI.

About 60,000 developers are working on drone applications with DJI, including pipeline inspection apps to 3D mapping. Applications related to critical infrastructure and first responders have been particularly hot during the pandemic. “That kind of stuff can’t go on pause,” Gasparic says. “That’s where drones have really come into their own.”

One DJI drone feature that is getting more use during the pandemic is the speaker that the company added to its popular Mavic 2 Enterprise edition drone. Police or other government authorities have flown drones over streets and beaches to monitor how well—or poorly—people are social distancing and then use the speaker on the $1,500 device to ask them to move apart.

The use of such drones, and far more sophisticated military surveillance drones, at Black Lives Matter protests, has been far more controversial, however, drawing protests from civil liberties groups.

But most of the boost in use of drones during the pandemic has been far more prosaic.

DroneDeploy, a drone software startup in San Francisco, has seen a huge increase in business during the pandemic. However, it’s been for the same kinds of general applications it was offering before.

For example, DroneDeploy has a program that analyzes drone footage of farmers’ fields and helps make recommendations about when to apply pesticides. The number of agriculture flights has tripled over the past three months. Similarly, the company is seeing 2.5 times as many flights using its energy app, which solar panel installers use to calculate where to place panels on customers’ roofs. Meanwhile, flights by companies involved in the construction industry are up 70%.

“Drones are kind of the perfect socially distant worker,” says DroneDeploy CEO Michael Winn. “They can collect data and share it with people who aren’t present.”

Similarly, Alphabet’s Wing drone delivery division has expanded its services into more industries. After the pandemic hit, orders through an existing drone-delivery partnership with Walgreens in Virginia jumped for medicine, toilet paper, and groceries. Last month, Wing expanded to deliver school and library books by drone.

The Flytrex service in North Dakota relies on drones the company has created that are capable of carrying packages weighing up to nearly seven pounds for up to 3.5 miles. Customers must order using a Flytrex app, through which about 200 Walmart items—from diapers and toothpaste to hamburger buns—are available. Flytrex packs the drone at the store and then flies it to a customer’s backyard, where the order is lowered by cable from a height of about 80 feet.

Fortune asked Walmart for comment and will update this story if the company responds.

CEO Bash declines to provide details about his company’s revenue. But he argues that his service is cheaper than delivering by car or truck on a per delivery basis. A drone operator can make up to 15 deliveries an hour versus about three per hour using a car, he says. Moreover, delivery drivers can be easily retrained to become drone operators. “We don’t need an ex-787 pilot,” Bash says. “After two days of training, a driver can become an operator.”

Startups that have tried to pitch their custom flying machines for more direct virus fighting tasks have had a more difficult time taking off. In Westport, Conn., police worked with dronemaker Draganfly to spot infected people who failed to quarantine, by using computer vision and other sensors on drones to detect symptoms of COVID-19 like coughing and fevers.

But as soon as the plan was made public in April, residents and civil rights groups objected. “Any new surveillance measure that isn’t being advocated for by public health professionals and restricted solely for public health use should be promptly rejected,” David McGuire, executive director of the ACLU of Connecticut, said in a statement at the time.

The police promptly dropped the program, and Draganfly has pivoted to building ground-based sensors for detecting infected people for use on movie sets and other business locations. The company may try a similar drone surveillance program in the future, a spokesman tells Fortune.

Additionally, drone startup EagleHawk, based in Syracuse, N.Y., has been testing a new feature on its drones that enables the machines to fly over outdoor or indoor stadiums and spray disinfecting substances to kill COVID-19. Though large-scale drone spraying projects to combat the virus have been used in parts of China and India, EagleHawk has yet to announce any U.S. customers for its offering.

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