[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
DISRUPTER SERIES: DELIVERING TO CONSUMERS
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HEARING
BEFORE THE
SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 23, 2017
__________
Serial No. 115-35
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
26-518 WASHINGTON : 2018
COMMITTEE ON ENERGY AND COMMERCE
GREG WALDEN, Oregon
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
FRED UPTON, Michigan BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
BILLY LONG, Missouri KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
BILL FLORES, Texas Massachusetts
SUSAN W. BROOKS, Indiana TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma RAUL RUIZ, California
RICHARD HUDSON, North Carolina SCOTT H. PETERS, California
CHRIS COLLINS, New York DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
Subcommittee on Digital Commerce and Consumer Protection
ROBERT E. LATTA, Ohio
Chairman
JANICE D. SCHAKOWSKY, Illinois
Ranking Member
GREGG HARPER, Mississippi BEN RAY LUJAN, New Mexico
Vice Chairman YVETTE D. CLARKE, New York
FRED UPTON, Michigan TONY CARDENAS, California
MICHAEL C. BURGESS, Texas DEBBIE DINGELL, Michigan
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
DAVID B. McKINLEY, West Virgina JOSEPH P. KENNEDY, III,
ADAM KINZINGER, Illinois Massachusetts
GUS M. BILIRAKIS, Florida GENE GREEN, Texas
LARRY BUCSHON, Indiana FRANK PALLONE, Jr., New Jersey (ex
MARKWAYNE MULLIN, Oklahoma officio)
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
GREG WALDEN, Oregon (ex officio)
C O N T E N T S
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Page
Hon. Robert E. Latta, a Representative in Congress from the State
of Ohio, opening statement..................................... 1
Prepared statement........................................... 2
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 3
Hon. Joseph P. Kennedy, III, a Representative in Congress from
the Commonwealth of Massachusetts, opening statement........... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 6
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, prepared statement..................................... 54
Witnesses
Bastian Lehmann, Founder and CEO, Postmates...................... 7
Prepared statement........................................... 10
Brian Wynne, President and CEO, Association for Unmanned Vehicle
Systems International.......................................... 15
Prepared statement........................................... 17
Harry J. Holzer, John Lafarge, Jr., S.J. Professor of Public
Policy, Mccourt School of Public Policy, Georgetown University. 23
Prepared statement........................................... 25
Shyam Chidamber, Chief Evangelist and Senior Advisor, Flirtey.... 29
Prepared statement........................................... 31
DISRUPTER SERIES: DELIVERING TO CONSUMERS
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TUESDAY, MAY 23, 2017
House of Representatives,
Subcommittee on Digital Commerce and Consumer
Protection,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:15 a.m., in
room 2322 Rayburn House Office Building, Hon. Robert Latta
(chairman of the subcommittee) presiding.
Members present: Representatives Latta, Harper, Lance,
Guthrie, McKinley, Kinzinger, Bilirakis, Bucshon, Mullin,
Walters, Costello, Schakowsky, Cardenas, Dingell, Matsui,
Welch, Kennedy, Green, and Pallone (ex officio).
Staff present: Mike Bloomquist, Deputy Staff Director;
Blair Ellis, Digital Coordinator/Press Secretary; Melissa
Froelich, Counsel, Digital Commerce and Consumer Protection;
Adam Fromm, Director of Outreach and Coalitions; Giulia
Giannangeli, Legislative Clerk, Digital Commerce and Consumer
Protection/Communications and Technology; Bijan Koohmaraie,
Counsel, Digital Commerce and Consumer Protection; Paul Nagle,
Chief Counsel, Digital Commerce and Consumer Protection;
Madeline Vey, Policy Coordinator, Digital Commerce and Consumer
Protection; Everett Winnick, Director of Information
Technology; Michelle Ash, Minority Chief Counsel, Digital
Commerce and Consumer Protection; Jeff Carroll, Minority Staff
Director; Lisa Goldman, Minority Counsel; Caroline Paris-Behr,
Minority Policy Analyst; and Matt Schumacher, Minority Press
Assistant.
OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Latta. Well, good morning. I would like to call the
Subcommittee on Digital Commerce and Consumer Protection to
order, and the chair now recognizes himself for 5 minutes for
an opening statement.
Good morning, and welcome again to the Digital Commerce and
Consumer Protection Subcommittee hearing. Today's hearing is a
continuation of our Disrupter Series in which our subcommittee
explores emerging technology and all the ways innovation is
reshaping industries. The focus of our hearing this morning is
product and package delivery, and I am excited to learn about
the new, innovative ways businesses are interacting with
consumers and how technology is being leveraged to deliver
goods quickly and safely to consumers.
The U.S. e-commerce market is projected to reach $500
billion by 2018 and is expected to see substantial growth by
2020. When we think of e-commerce rarely do we consider its
physical footprint, the process of actually fulfilling the
online order, and facilitating its delivery. However, my home
State of Ohio has become somewhat of an e-commerce hub. Ohio
offers favorable geographic location, a workable transportation
network, a business-friendly regulatory framework, and skilled
laborers. Because of these key items, Ohio is home to roughly
760 warehouse establishments including many e-commerce
fulfillment operations.
In today's digital, on-demand economy, consumers have come
to expect flexibility and quick delivery. In fact, a 2016
survey indicates that same-day delivery is a priority for
consumers and that consumers want to have options for where
their deliveries go, whether that be through their office or
some other personalized pickup point. Technologies such as
drones and other automated couriers offer innovative approaches
to meeting these demands. For example, drones allow fast and
efficient delivery because they have the ability to traverse
difficult terrain, fly over bodies of water, and avoid the
natural traffic congestion that slows traditional delivery.
I look forward to hearing more about the use of drones and
other automated delivery systems from our witnesses today and
how such technological advancements are being used to meet
consumer demands and what the safety issues are. I also look
forward to exploring how we as policymakers can promote
innovation and address any regulatory barriers.
Again I want to thank our witnesses for being with us today
as we have this discussion today. And I have a couple minutes
left and I recognize the vice chairman from Mississippi.
[The prepared statement of Mr. Latta follows:]
Prepared statement of Hon. Robert E. Latta
Good morning and welcome to the Digital Commerce and
Consumer Protection subcommittee hearing. Today's hearing is a
continuation of the Disrupter Series in which our subcommittee
explores emerging technology and all the ways innovation is
reshaping industries. The focus of our hearing this morning is
product and package delivery. I am excited to learn about some
of the new innovative ways businesses are interacting with
consumers and how technology is being leveraged to create
faster, cheaper and more flexible delivery options.
The U.S. e-commerce market is projected to reach $500
billion by 2018 and is expected to see substantial growth by
2020. When we think of e-commerce rarely do we consider its
physical footprint- the process of actually fulfilling the
online order and facilitating its delivery. However, my home
state of Ohio has become somewhat of an e-commerce hub. Ohio
offers favorable geographic location, a workable transportation
network, a business friendly regulatory framework and skilled
laborers. Because of these key items, Ohio is home to roughly
760 \1\ warehouse establishments, including e-commerce
fulfillment operations for Amazon, J.C. Penny, Home Depot and
many more.
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\1\ http://www.cnbc.com/2016/04/08/this-is-why-ohio-is-becoming-
the-e-commerce-capital.html
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In today's digital, on-demand economy, consumers have come
to expect flexibility and quick delivery. In fact, a 2016
survey indicates that same-day delivery is a priority for
consumers and that consumers want to have options for where
their deliveries go- whether that be their office or some other
personalized pickup point. Technology, such as drones and other
automated couriers, offer innovative approaches to meeting
these demands. For example, drones allow fast and efficient
delivery because they have the ability to traverse difficult
terrain, fly over bodies of water and avoid the natural traffic
congestion that slows traditional delivery.
I look forward to hearing more about the use of drones and
other automated delivery systems from our witnesses today and
how such technological advancements are being used to meet
consumer demands. I also look forward to exploring how we, as
policymakers, can promote innovation and address any regulatory
barriers. Thank you all for joining us today for this important
discussion.
Mr. Harper. Thank you, Mr. Chairman, for calling today's
hearing, the latest in the subcommittee's Disrupter Series, to
examine the development and implementation of innovative
delivery services for businesses and consumers. One aspect we
will focus on is the potential commercial application of
product delivery systems via unmanned aerial aircraft systems,
also referred to as UAS or drones, and how to ensure the safe
integration of these services into the national airspace
system.
In May of 2015, Mississippi State University, which is in
my congressional district, and the Alliance for Systems Safety
of Unmanned Aircraft Systems through Research Excellence, or
ASSURE for short, was selected by the Federal Aviation
Administration to be the lead for the National Center of
Excellence for Unmanned Aircraft Systems.
Mississippi State University's ASSURE is a consortium of
academic institutions along with government and industry
partners tasked with identifying and researching issues
critical to the safe integration of UAS into the national
airspace system, and developing policy recommendations on the
expanding use of unmanned aircraft.
Although only 2 years old, ASSURE's UAS research is already
influencing the FAA's thoughts regarding small UAS flight
operation over people and property. Additionally, ASSURE is
engaged in an aggressive research program to support beyond
visual line of sight operations. Safety concerns regarding
flights over populated areas and beyond visual line of sight
must be resolved before safe and routine UAS delivery services
are part of our daily lives. And a successful business case can
be made after that for continued investment in this innovative
idea.
The ASSURE UAS air to ground collision study released in
April is challenging previous perceptions regarding human
injury in the event of a small UAS impact. This project will be
continuing as a second phase starting in June, testing numerous
types of UAS and increasing the human impact component of the
research. I think it is crucial that we continue that.
I am pleased to have this hearing and look forward to
hearing what the witnesses have to say, and with that I yield
back.
Mr. Latta. Thank you very much. The gentleman yields back.
I yield back the balance of my time, and the chair now
recognizes for her opening statement the gentlelady from
Illinois, the ranking member of the subcommittee.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Chairman. Many consumers
today like to have their purchases delivered directly to their
homes. The rise in online shopping and mobile purchases has
meant more business for the post office delivery workers,
couriers, truckers, and anyone else involved in moving goods
from the warehouse to the doorstep.
Given the rise in home delivery, it is no surprise that
companies are involved in this space. Today we will hear about
a few of those innovations, specifically drones and delivery
robots. I have no shortage of basic questions about the
technologies.
How does the delivery robot know when to cross the street?
How worried should I be about these things running into me? One
of my staffers saw this cooler-looking object with a flag on it
next to him, and it startled him, on the sidewalk. And
researchers and firms will continue to work through
technological challenges as they work to improve automation.
Meanwhile, Congress needs to work through the policy changes
that technologies like this represent.
This is yet another hearing in our Disrupter Series, and
disruption can be good or bad depending on how you like the
current system and what it is being replaced with. In past
hearings we have weighed concerns about safety, privacy, and
other protections. One topic that I don't think we hit on
enough is the impact on our workforce.
It is a simple reality disruptive technologies like
automation will disrupt some American livelihoods. How would we
adjust if in a few years we no longer need delivery workers?
This is not a hypothetical question. Today there are many
workers without college degrees who used to have good jobs with
decent income but now struggle with long periods of
unemployment and lower earning potential. The American economy
as a whole might be growing, but Americans in certain sectors
feel like they are falling further and further behind.
How do we address this? Clearly, blocking the adoption of
new technology cannot be a long-term strategy or solution. We
need to look carefully at our education system. Are today's
students acquiring skills that will be still useful as
automation progresses? For Americans currently in the
workforce, how do we assist worker when their existing skills
fit fewer and fewer available jobs?
We need a robust system of assistance and job training to
ensure that Americans can maintain a decent standard of living.
We must also ensure that protections keep up with new
technology. Old safeguards don't go out the window when a new
technology appears. Workers deserve dignity whether they work
in conventional delivery or work on automated delivery systems.
That means fair wages, a safe workplace, and the right to
collective bargaining.
Consumers need assurances of privacy, safety, and fairness
whether they are buying a product in a store and ordering home
delivery by a drone or via mobile app. The challenge of
adapting to technological changes is by no means unique to the
delivery sector, but automation and delivery advances, I
believe now is the time to wrestle with difficult policy
questions. As the Subcommittee on Digital Commerce and Consumer
Protection, our job is not to just marvel at cool new stuff,
though it can be fun to see what is being developed, we must
get beyond the novelty factor and determine the real policy
issues at play and legislate accordingly.
I look forward to hearing our witnesses' perspectives on
development and consumer delivery. I hope that you can provide
some insight as we determine how federal policy keeps up with
the latest technology, and I yield back.
Mr. Latta. Thank you very much. The gentlelady yields back.
The chairman of the full committee, the gentleman from Oregon,
will not be making an opening statement. Is there anyone on our
side that would like to claim his time? If not, the chair would
then recognize the gentleman from Massachusetts for 5 minutes.
OPENING STATEMENT OF HON. JOSEPH P. KENNEDY, III, A
REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF
MASSACHUSETTS
Mr. Kennedy. Thank you, Mr. Chairman, and I want to thank
the ranking member Ms. Schakowsky as well for their continued
commitment to this series and for encouraging this
conversation. To the witnesses today, I greatly appreciate you
taking the time to join us and I hope you will bear with us as
we attempt to keep up with the rapid pace with which you
innovate. Thank you for being here.
Technology is in its infancy and provides a rare
opportunity for bipartisan agreement in supporting its growth
and your companies. And with increased funding for our
scientists and investments in STEM education, we can ensure
that this critical R&D continues and ultimately consumers
benefit in ways that we have yet to even imagine. That future
is as bright as it is exciting.
But greater AI, machine learning, and automation can bring
with it significant dislocation in our labor markets and with
that job loss, as with it comes greater social responsibility
to those who are left behind. That is part of the conversation
that we need to be having in this subcommittee. As Congress
defends our small businesses and traditional industries, we
need to prepare for a future where drones may replace
deliverymen, where computers replace cashiers, where even apps
may replace doctors. And that is why we have to extend STEM
education into every single school regardless of ZIP Code, why
we need to begin investing in workforce programs for all ages,
today not tomorrow.
But balancing our proud history and our bright future will
require vigilance and engagement at all levels of government
and the private sector and I would greatly appreciate hearing
from our witnesses about how we prepare our working families
for the role in which you view federal policy and helping to
strike this balance in encouraging you to innovate and solve
challenges that we have yet to even design or yet to imagine,
while ensuring that we remain and retain a talented, dedicated,
educated workforce that in fact is going to power that growth
to begin with.
And with that I would reserve the balance of my time or
yield it to the ranking member of the full committee if he is
ready for it.
Mr. Latta. Thank you very much. The ranking member of the
full committee is recognized.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. I don't know if I can
put this all in, in the time allotted, but if not I will just
ask you to include it in the record.
This hearing will explore the new and innovative ways
consumers will receive goods in the future and in some cases
right now. Today, 2-day delivery of a package is commonplace
and now we are seeing on-demand delivery in under an hour.
These deliveries are not just being carried out by people, but
now also by robots, and in the future drones.
As I have stated at past hearings regarding new
technologies, privacy, data security, and cybersecurity must be
baked into the devices and the software. We only need to look
to the front pages to see that cyber attacks such as Russian
hacking have become an everyday occurrence. Creators and
manufacturers of internet-connected technology must take
responsibility for mitigating this problem.
This committee has had more than ten hearings as part of
the Disrupter Series. These hearings have given members a taste
of the latest technologies that are changing how our economy
works, and this exposure is important. However, I am hoping at
today's hearing we can begin to discuss how these disruptions
affect the American worker.
While no one is advocating for slowing down innovation and
in fact we are continually pushing for more innovation, we
should not forget that these new disrupters can bring
challenges. As policymakers we should acknowledge that some of
the ways industries mechanize and automate can also cause job
loss or wage loss, so while the national economy benefits
individual workers may suffer.
Disruption is nothing new. While the agriculture sector has
become vastly more productive, it now is a smaller percentage
of the overall workforce. And as this committee is well aware,
the total number of manufacturing jobs has shrunk, in part, due
to automation. The automation we are discussing today could,
for example, have an impact on truck drivers and delivery
services.
Economists have studied long haul truck driver jobs and
believe these jobs are at risk as driving becomes more
automated. And today, 1.7 million people are employed driving
these routes. They are good wage jobs that will be displaced,
and this hearing is mostly focused on short distance delivery
services, which employs over one million workers, so some of
these jobs are surely at risk too.
And finally, I don't want to be an alarmist and in fact I
believe we as a society can meet the challenge, but we need to
be thinking about the potential job impacts now so we can
prepare for the future. We need to revisit whether our
education systems are preparing the next generation for the
shifting workplace, we need to ensure that retraining programs
are effective, and we need to invest more in research and
development to ensure that the United States continues to lead
the world in innovation.
It is time we try to plan ahead instead of letting
ourselves be caught off guard when it is too late. And I yield
back.
Mr. Latta. Thank you very much. The gentleman yields back
and that will conclude the member opening statements. The chair
would like to remind all members that pursuant to the committee
rules, all members' opening statements will be made part of the
record.
Again I want to thank all of our witnesses for being with
us today and taking time to testify before our subcommittee.
Today's witnesses will have the opportunity to give opening
statements followed by a round of questions from our members.
Our witness panel for today's hearing will include Mr.
Bastian Lehmann, founder and CEO of Postmates; Mr. Brian Wynne,
president and CEO at Association for Unmanned Vehicle Systems
International; Dr. Harry Holzer is a John LaFarge Jr., S.J.
Professor of Public Policy at the McCourt School of Public
Policy at Georgetown University; and Mr. Shyam Chidamber, Chief
Evangelist and Senior Advisor at Flirtey.
We appreciate you all being here with us today. And we will
begin the panel discussion today with Mr. Lehmann and you will
be recognized for 5 minutes to give your opening statement. And
just pull that mic right up to you and thanks for being here
with us today.
STATEMENTS OF BASTIAN LEHMANN, FOUNDER AND CEO, POSTMATES;
BRIAN WYNNE, PRESIDENT AND CEO, ASSOCIATION FOR UNMANNED
VEHICLE SYSTEMS INTERNATIONAL; HARRY J. HOLZER, JOHN LAFARGE,
JR., S.J. PROFESSOR OF PUBLIC POLICY, MCCOURT SCHOOL OF PUBLIC
POLICY, GEORGETOWN UNIVERSITY; AND, SHYAM CHIDAMBER, CHIEF
EVANGELIST AND SENIOR ADVISOR, FLIRTEY
STATEMENT OF BASTIAN LEHMANN
Mr. Lehmann. Chairman Latta, Ranking Member Schakowsky, and
distinguished members of the Subcommittee of Digital Commerce
and Consumer Protection, let me begin by stating that our
thoughts and prayers are with the people of Manchester in the
U.K. this morning.
As a co-founder and CEO of Postmates, we recognize the
power of global networks to overcome intolerance and power
opportunity, so it is a pleasure to join you and my
distinguished co-panelists this morning for a discussion on how
cutting edge technologies and innovation are transforming
traditional logistics and delivery networks.
While advances made by on-demand platforms has certainly
disrupted traditional models of how products and goods move
across the country, it is important to start our discussion
with an overview of how the nation's leading on-demand
logistics provider, Postmates, the company I co-founded just 6
years ago, is disrupting the rate and pace at which commerce is
flowing in your own backyards and districts.
When Postmates is described as a leader in on-demand
delivery, we quite literally mean that. Through the tap of a
button on your phone, the platform enables anyone to get
anything from their neighborhoods delivered to their doorsteps
in just a couple of minutes. Where some logistics companies try
to build a warehouse outside of a city and funnel goods into
it, we believe in a simple philosophy. Our cities, our towns,
our communities, they are our warehouses. They are home to
unique talents and creative expertise that craft and curate
high quality products, food, and merchandise that power our
economies.
We aim to understand the inventory available in each given
town, index each of its product offerings, and connect you
directly to that experience by having a fleet of couriers,
which we refer to as Postmates, deliver this inventory. We
allow you to find and order from any restaurant or store in
your city.
That means in addition to delivering prepared food, the
platform is also empowering everyone from public school
teachers ordering supplies to their classrooms to helping
families of the elderly ensure groceries or medicines are
delivered to their doorsteps. And with over 65,000 active
Postmates across 45 major metropolitan markets covering 200
U.S. cities, our platform facilitates more than two million
deliveries per month. This year alone we are on track to
facilitate $1 billion worth of total goods sold on the
Postmates platform. And since we started the platform, our
Postmates have earned over $300 million in income.
But this is just the beginning. The total sales of food and
groceries last year in the United States alone was nearly $1.4
trillion, but less than 1.5 percent of that was sold online or
through cell phones. That includes ourselves, our competitors,
even big pizza delivery companies.
With over 10,000 merchants throughout the country from
major brands like Chipotle, Apple, and Starbucks to local
pharmacies and corner bakeries, Postmates is able to strike
both local and national partnerships that continue to power
sales throughout local economies. That is the power of
Postmates and the on-demand economy. With each delivery we
generate critical sales for merchants in the towns each of you
represent.
But that story of economic empowerment is also told through
the lens of flexibility we offer our fleet of Postmates making
each delivery. Currently, an independent contractor-based model
provides on-demand platforms like Postmates and the couriers
themselves optimal flexibility. By empowering our Postmates to
control how and when they offer their service on our platform,
we enable students to supplement their income between classes,
aspiring entrepreneurs to save capital for new business
opportunities, or parents to earn a little extra by completing
deliveries after dropping their kids at school or soccer
practice. All told, these sales and earnings are broadening the
tax base which are being reinvested right back into our
communities.
So we started asking ourselves a key question. Can we
expand this base of earnings all while continuing to rev the
engines of economic impact in your districts? How can we do
right by our couriers in helping them earn higher incomes, and
how can we manage the on-demand logistics in particular dense
urban and suburban populations? One such way led us to an
experiment with what I like to refer to as sidewalk class
robotics.
As pointed out in a recent piece in the Harvard Business
Review, executives have to cut through a lot of hype around
automation and ``leaders need a clear-eyed way to think about
how these technologies will specifically affect their
organizations.'' The right question isn't which jobs are going
to be replaced, but rather what work will be refined, and how.
And this does not need to be a terrifying exercise that evokes
imagery of Terminator or a world where an entire labor force
gets displaced.
So we started looking at the trend lines to begin with a
clear-eyed assessment of our landscape. We have people who use
cars, bikes, scooters, motorcycles, or walk to complete a
delivery and each have a different strength and suitability for
different deliveries.
But we also noticed that in particular dense or crowded
clusters of downtown neighborhoods, the distance between
popular delivery zones and popular restaurants or stores could
often be quite short. While the Postmates platform is ready and
equipped to make deliveries, sometimes these short distance
stretches aren't as financially advantageous to our couriers
when compared to longer distance deliveries, and tips are often
based on the distance traveled.
One way to ensure the continuity of short distance
deliveries while reserving our hardworking Postmates for longer
distance deliveries has been experiencing with robots. Through
partnerships with robotic companies on both the east and west
coasts, we have started to be able to measure how robots may be
able to optimize delivery times when compared to current
numbers. Most importantly, we can focus our fleet of Postmates
to complete deliveries that are likely to connect them to
incomes at a much higher rate.
Our thesis is then that with both human hand and robotic
operators on the ground, commerce can move at even higher rates
with more functional ways to make deliveries in each city. In
the long term, this could ultimately help drive down the
overall costs of delivery as the supply of couriers increases.
We at Postmates do not see a role in which robotics will be the
ultimately delivery mechanism, instead taking these incremental
and responsible steps to test automation without shortchanging
our human workforce provides us with three tangible gains.
Mr. Latta. Pardon me, Mr. Lehmann. If you could just, we
are running over right now on your time. If you want to just
wrap up real quick we would appreciate that. Thank you.
Mr. Lehmann. Absolutely. As I said, we don't believe that
just robots will be doing deliveries in the future, but we also
agree that if that happens we have to be aware of a future in
where we invest into STEM education, where we and Congress
should and must work to advance a budget which prioritizes
improving STEM teaching, expanding access to rigorous STEM
courses, addresses bias for underrepresented students in STEM,
and revitalizing apprenticeship programs in this country to
skill up workers no matter their age.
[The statement of Mr. Lehmann follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. Thank you very much. And Mr. Wynne, you are now
recognized for 5 minutes for your opening statement. Thanks
very much.
STATEMENT OF BRIAN WYNNE
Mr. Wynne. Chairman Latta, Ranking Member Schakowsky, and
members of the subcommittee, thank you very much for the
opportunity to participate in today's hearing to discuss
innovative delivery systems. I am speaking on behalf of the
Association for Unmanned Vehicle Systems International which
represents unmanned systems in all domains. Today I will be
focusing my remarks on unmanned aircraft systems, or UAS.
From inspecting pipelines to news gathering to mapping
flood zones, UAS help us save time, save money, and, most
importantly, save lives. It is no wonder why thousands of
businesses, small and large, have already embraced this
technology and many more are considering integrating it into
their future operations, including for delivery.
The FAA implemented the small UAS rule, also known as Part
107, last August. It was the result of years of collaboration
between industry and government that established a flexible,
risk-based approach to regulating UAS. These regulations have
been in effect for more than 8 months and there is strong
evidence the commercial UAS market is poised for significant
growth. As of this month, there are more than 120,000 UAS
registrations with the FAA, the vast majority of which are
hobbyists; of those, 62,000 platforms have been registered for
commercial use. The FAA expects more than 400,000 UAS could be
flying for commercial purposes over the next 5 years, a more
than six-fold increase from today.
An economic analysis by AUVSI projects that the expansion
of UAS technology will create more than 100,000 jobs and
generate more than $82 billion to the economy in the first
decade following full integration into the national airspace.
After witnessing the growth of the industry over the last few
years, under the right conditions we believe these numbers
could go higher.
Many of our members are exploring ways UAS can transport
goods such as household items, medical supplies, food, maybe
even people in the not-too-distant future. Companies such as
Amazon, Google, and UPS are among the major players who hope to
eventually launch UAS delivery services. Several companies are
already testing the delivery capabilities of UAS both
domestically and abroad, including at Mississippi State, sir.
We are at the dawn of a new American renaissance in
technology, one that deserves government attention and support.
In the past, government invested heavily in physical
infrastructure, from the nation's air traffic control system to
the Interstate Highway System, which ultimately had a
tremendous impact on commerce. The benefits, however, did not
stop there. Over time, the safety, security, and efficiency
gains we achieved as a nation have vastly outweighed those
costs, and the unmanned systems industry will be no different.
We need a new national imperative in unmanned systems that,
like the air traffic control system and the Interstate Highway
System before it, create greater capacity, reduce road
congestion, fulfill consumer demands, and facilitate the future
of commerce. Industry is bringing the technology; government
needs to do more to support it and advance innovations such as
delivery services.
The vital prerequisite for advancing UAS is an
appropriately funded FAA that can meet the IT, employment, and
staffing needs required for the future. The FAA needs, first
and foremost, to automate its UAS procedures. Automation will
also be important beyond Part 107 for more complex operations
such as delivery services. Many of its important management
tools and processes which facilitate safer and more seamless
UAS operations currently operate by manual data input or
processing. The FAA also needs more employees who are dedicated
to future UAS rulemakings to move us beyond the current
regulations.
Industry is not relying on the FAA and government alone to
advance UAS. It is currently shouldering many of the R&D costs
to spur innovation, finding solutions to make UAS fly higher
and further more safely and efficiently. Industry has also been
a close partner with government in advancing a UAS traffic
management system known as UTM and in developing standards for
remotely identifying operators and owners of UAS.
The UAS industry is primed for incredible growth thanks to
industry representatives and government regulators nurturing
innovation that helps business be competitive in the
marketplace. We hope that these efforts can be sustained and
that we continue to reach new historic milestones in
integrating this technology into the national airspace and pave
the way for regular and widespread UAS deliveries.
Thank you again for the opportunity. I look forward to
questions from the panel.
[The statement of Mr. Wynne follows:]
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Mr. Latta. Thank you very much. And Dr. Holzer, you are
recognized for 5 minutes.
STATEMENT OF HARRY HOLZER
Mr. Holzer. Chairman Latta, Ranking Member Schakowsky and
committee members, thank you for inviting me today to share my
thoughts on the new digital technologies and how they affect
the labor market and the economy. I will tell you up front that
I know nothing about drones, so I defer completely to my other
colleagues at the table. But I know a little bit about labor
markets and technology and that is mostly what I will focus on.
So I would like to make five broad points today. Point
number 1, employment in trucking, courier services, and
warehousing has actually been growing quite rapidly recently
and relatively good jobs are being created, all of this because
of growing e-commerce. A hundred thousand jobs were created
just in the past year in these sectors. I believe that trend
will continue for years to come as e-commerce spreads. Since
the loss of delivery jobs associated with drones or even
autonomous vehicles remains at least somewhat speculative in
terms of its timing and magnitudes, I don't expect the
employment gains in these sectors to disappear anytime soon.
Point number 2, broadly, disruptive technologies tend to
raise our labor market productivity and therefore our living
standards. Given how flat productivity growth has been in
recent years in the overall economy, the development of
technologies that enhance productivity should be welcomed. And
I will say very clearly it is difficult if not impossible to
have strong earnings growth over time for our workers if
productivity growth remains so weak.
Point number 3, periodically we have these panics in the
U.S. and elsewhere over mass displacements in unemployment
associated with new technologies--remember the Luddites in
Britain in the 19th century? But maybe more relevant for us,
there was a large automation scare in the U.S. in the late '50s
and early '60s because of fear that computers would take
everyone's jobs. These fears are almost always overblown.
New jobs are created when automation causes others to
disappear, and workers with skills that complement the new
technologies actually face a better labor market for their
skills. And what are these complementary skills? Of course,
technicians and engineers, but almost anyone with creative
skills or social and communicative skills, those workers all do
better. Of course, some workers are substitutes for technology,
not complements; they do worse.
Therefore, point number 4, many millions of workers in the
U.S. and especially less educated men have been hurt by digital
technologies in the past 4 decades in manufacturing and in
other industries as well, either when they are directly
displaced by these technologies or because the labor market
overall has grown less hospitable to them. Those displaced by
technologies often experience lengthy unemployment, and when
they become re-employed on average they take jobs with wages 25
percent lower, and that is on average.
But more broadly, the real earnings of men with only high
school diplomas or less have stagnated or even fallen over the
past 4 decades, again depending on how you measure that and
they have fallen behind in real terms relatively of every other
major group in the labor force. And in response to these
stagnating and declining wages, millions of prime-age men have
left the workforce and that is terrible problem because their
disappearance in the workforce hurts themselves, their families
and communities, and the U.S. economy overall.
Therefore, point number 5, a range of important policies
should be adopted and strengthened to help workers. The ones
hurt by the new technologies, help them make adjustments in
this new labor market. We need policies to ensure that workers
share in whatever productivity growth is generated by these new
technologies over time. And I think of those technologies
broadly as falling into three buckets.
From my point of view, the most important is education and
workforce development in addition to STEM education, other
kinds of education in the K-12 years--critical thinking,
communication skills, et cetera--but really helping more people
get the post-secondary credentials that the labor market finds
valuable. We need a lot more help there.
Secondly, I think it is very important to maintain a robust
system of unemployment insurance, but perhaps one with some
reforms to encourage workers to build new skills and get jobs
more rapidly and as soon as possible. I also believe it is
important to talk more about wage insurance where displaced
workers if they take new jobs at lower wages have part of their
wage loss compensated, and we can talk about that.
And finally, the third bucket, we need to ensure that
workers share in the productivity gains generated. That
includes protections for the right to collectively bargain in
the private and public sectors as well as limits on anti-
competitive practices by employers such as the growth of
noncompete clauses in their contracts with worker, and happy to
discuss all of this further. Thank you very much.
[The statement of Mr. Holzer follows:]
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Mr. Latta. Well, thank you very much. And Mr. Chidamber,
you are recognized for 5 minutes for your opening statement.
Thank you very much for being here.
Could you--there we go.
STATEMENT OF SHYAM CHIDAMBER
Mr. Chidamber. All right, let me begin again if I don't
mind. Thank you, Chairman Latta. And thank you, members of the
committee, to invite me to this hearing. My name is Shyam
Chidamber. I am a senior advisor and chief evangelist at
Flirtey, a leading drone delivery service company.
In my allotted time I would like to do two things: give you
a very brief history of our remarkable company and share with
you our perspective on drone technology and where it is going.
Flirtey is a startup company that has its roots in Sydney,
Australia. In 2013, we began testing textbook delivery at the
University of Sydney. Our goal was for students to place the
orders using a smart phone app and receive their books within
minutes at their current GPS location anywhere on campus.
We are now an American company headquartered in Reno,
Nevada. We were chosen by Y-Combinator, the famous Silicon
Valley business incubator; have collaborated at NASA; the
University of Reno; Virginia Tech; The Johns Hopkins Medical
Center. We have been funded by venture capitalists like Menlo
Park Venture, Qualcomm Ventures, and several others. About a
quarter of our workforce are U.S. veterans and we employ young
graduates from engineering schools who want to change the world
through innovation.
Over the last 24 months we have achieved several major
milestones in U.S. aviation history. Here are a few. In July
2015, we made the first FAA approved drone delivery on U.S.
soil. We delivered essential medicines to patients at a free
medical clinic in southwestern Virginia in collaboration with
NASA Langley, which our CEO Matthew Sweeny referred to as our
Kitty Hawk Moment.
In June 2016, we conducted the first Ever Ship to Shore to
Ship transport of medical supplies, simulating the
applicability of drones to emergency medical situations in the
aftermath of a natural disaster. Appropriately enough, this was
conducted in Cape May, New Jersey, a few miles from the
bullseye of Hurricane Sandy.
I have a short video to play. If we can play that I think
you will appreciate the small example.
[Video shown.]
Mr. Chidamber. Hopefully that gives you a little idea.
In 2016, we made the first FAA approved delivery to a
suburban home in Reno, Nevada. Partnering with 7-Eleven, we
delivered over-the-counter medicine, food, and drinks to
wonderstruck customers. Most of all we are delighted that our
historic drone delivery in Wise, Virginia, has been recognized
by the Smithsonian Air and Space Museum with an exhibit that
will be opening soon. We are a genuine American success story.
Most people are no doubt familiar with the military
applications of drone technology. But I am here to suggest to
you that drones are a game changing commercial and civilian
technology, one I believe can save lives and enhance
lifestyles. Let me share two examples.
Imagine an elderly woman who lives by herself homebound
during a snowstorm. She finds to her dismay that she just ran
out of her insulin medication. The snowstorm has raged all
night, her driveway is not clear, and the roads are impassable.
She can pull out her cell phone and order her insulin refill
from a pharmacy and have it delivered by a Flirtey drone that
takes off from the pharmacy, flies using GPS and hovers close
to her front stoop and delivers a packet of lifesaving insulin.
As Doc says in Back to the Future, ``Roads? Where we are going
we don't need roads.''
Think of the handyman who fixes roofs for a living. Instead
of climbing a rickety ladder placed against a mossy gutter, he
pilots a drone over your roof, takes vivid HD pictures that you
can both see on an iPad. It is quick, easy, efficient, safe,
and more reliable. You have firsthand proof of the damage of
your roof, the handyman has to carry less hazard insurance, he
can inspect more roofs, and earn more money.
Mr. Latta. Pardon me, if you could also wrap up. We are
over about a minute on your time there.
Mr. Chidamber. Sure.
Mr. Latta. Thank you.
Mr. Chidamber. This future has been made possible by
simultaneous advances in multiple technologies--GPS, batteries,
avionics, materials, smart phones, 3-D printing, just to name a
few. The age of fast, efficient, safe, low cost, last mile
delivery using drones is at hand. There are some technical
challenges in drone design, battery capacity, and safety
systems that remain but these are being addressed. It is only a
question of time before we solve them.
So we at Flirtey ask you to imagine a future where in the
event of a natural disaster like Hurricane Katrina, drones
deliver urgent medical supplies, food, and water to those in
need. Imagine a future where you can order anything you like
online and have it reliably delivered to you within a few
minutes if not a few hours. Imagine a future where you can
order food and have it delivered directly to your location
within minutes. That future is at hand. Thank you.
[The statement of Mr. Chidamber follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. Well, thank you very much. And again, thank you
to all of our witnesses for your testimony today. We will
proceed to the question and answer portion of the hearing. I
will begin the questions by recognizing myself for 5 minutes.
And Mr. Wynne, in your testimony you touched on how
commercial drones offer societal and economic benefits. Would
you please explain the benefits and how commercial drone use
provides them?
Mr. Wynne. Well, we are starting today under Part 107
regulations with largely vertical infrastructure inspections.
That is because under the rule we have to keep drones within
visual line of sight. That is offering tremendous safety
benefits right away in industries such as cell towers, the
mobile cellular industry cell tower inspections and wind tower
inspections and so forth. People used to climb up on these
towers. Now they don't have to. They can execute their jobs
with this technology standing on the ground. Lots of different
public safety applications for the search and rescue is very
large among them, et cetera.
As we get permission to fly having demonstrated the safety
of the technology in use in the national airspace system, as we
have the ability to fly more complex operations, we will be
able to do more things and create even greater value. And that
is a progressive process. I think we have picked probably the
most challenging and most complex operation of all, delivery of
something in a congested airspace in an urban area, for
example, but we will get there.
Mr. Latta. Let me ask you if I can follow up with you, when
you are talking about the visual line of sight how far are you
talking then that you are in that visual line of sight, the
distance?
Mr. Wynne. Well, with my eyes or yours, sir? It depends on
the size of the drone if I am not wearing my glasses.
Mr. Latta. Or binoculars.
Mr. Wynne. We have to keep the drones under 400 feet, or
400 feet vertical of whatever it is we are inspecting either
laterally or above the structure, so we will call it under 400
feet.
Mr. Latta. All right. Well, thank you very much.
Mr. Lehmann, if I could turn to you, could you explain how
your platform Postmates chooses to complete deliveries? And one
of the things, or some of the questions, the technology we
talked about a little bit earlier about being able to cross the
street when it gets to its delivery point, if you could kind of
go into that, explain how that all works and functions?
Mr. Lehmann. Yes. There we go, sorry for that. First of
all, our humans probably do it just like we all do, so they
watch the traffic lights. And maybe it is surprising to hear,
but the sidewalk class robots do it in a very similar way. They
are equipped with sensors, ultrasonic sensors, LiDAR sensors.
They can be connected to the smart grid of a city, but by the
sensors alone they are able to read traffic lights. They see
humans walking on the street, they see other objects, and they
behave accordingly. They travel at roughly 4 miles an hour.
Mr. Latta. And how many do you have out right now that you
are testing?
Mr. Lehmann. There are a few dozen that we are testing with
on the east coast and on the west coast, and slightly more on
the west coast. We are partnering, in total, with four
companies and we are working on our own solution in-house as
well.
Mr. Latta. Thank you.
Mr. Chidamber, if I can turn to you, in your testimony you
mentioned about Flirtey's FFA approved delivery of medicine to
a clinic in Virginia. Would you explain again how the medicine
delivery for your FAA approved drone was made? Again, was that
line of sight or how did you get that to that delivery?
Mr. Chidamber. Yes. We did do the line of sight kind of
delivery at Wise, Virginia. It was under controlled conditions
obviously. There was complete line of sight during the time of
travel. The Flirtey drone took off from Lonesome Pine Airport,
which is a small county airport, and the medical camp was in a
fairgrounds which is about a mile and a half away. So there is
a clear line of sight standing on top of the roof to see the
entire flight as it progressed, so there was somebody watching
the drone the entire time.
Mr. Latta. And so as you said it was, you say, about a mile
and a half that----
Mr. Chidamber. Yes.
Mr. Latta. OK, and then also how high did the drone go
then?
Mr. Chidamber. It is about 3-400 feet.
Mr. Latta. Three to four hundred feet.
Mr. Chidamber. Yes, exactly.
Mr. Latta. Well, thank you very much. And I will yield back
the balance of my time and will recognize the gentlelady from
Illinois, the ranking member of the subcommittee, for 5
minutes.
Ms. Schakowsky. Thank you so much. As we have heard from
our witnesses today, automated delivery has the potential to
create new jobs for some people. For example, it is likely
there will be more jobs for people who work in engineering and
customer service, and new business opportunities could be
created if delivery services become cheaper and faster and more
widely accessible.
But with automation as with other shifts in the job market
there are winners and losers. So Dr. Holzer, you wrote in your
testimony and you said it today that millions of workers have
already been hurt by technological change in the past 4
decades. I wonder if you could expand on that a little bit.
Mr. Holzer. In the last 4 decades we have had two very
powerful forces affecting the U.S. labor market, technology as
well as globalization. On average, the technology has done more
to substitute for less educated workers especially in old
fashioned production jobs on assembly lines as well as clerical
workers in offices. And since that is a fairly routine kind of
work historically done by less educated workers, the machines
could do that more efficiently in globalization as well.
But this has been a good period for people that have post-
secondary education. As I said before, anyone with
communication skills, problem solving skills, et cetera, comes
out better in this process. The other thing to remember is that
as you suggested all of these technologies lower costs,
therefore lower prices to consumers. They have more money to
spend. They spend more sometimes in those sectors and elsewhere
and new jobs get created that way as well. But there is no
guarantee that everybody's wages will go up instead of down. It
is usually a mix.
Ms. Schakowsky. Let me ask you a real-world question. Will
workers who have gone to community colleges or universities be
affected differently than those who have not? Are we going to
have to expand educational opportunities?
Mr. Holzer. No one knows for sure, but our best guess is
that it will because artificial intelligence will enable these
machines to do more and more. Not just the routine work on
assembly lines, but work that professionals have done,
everything from finance and accounting to law and medicine.
So it will likely expand up the ladder. What happens is
that we will need to invest more in training people in those
complementary skills that the machines don't do. And so in all
these sectors there will have to be adjustments made and
students will have to invest in different kinds of education
than they did in the past.
Ms. Schakowsky. Let me ask you about geography a little
bit. Some experts have pointed out that the benefits of
technological change accrue disproportionately on our country's
coasts; meanwhile, jobs in rural areas and Middle America are
being lost to automation. I am wondering if you have done new
research on that.
Mr. Holzer. I have. I would put it slightly differently. I
think that workers in large metropolitan areas, even those
internally like Chicago and Cincinnati, have done very well.
When they have lost manufacturing jobs or similar, they have
often gained in health jobs, education jobs, et cetera. I think
it is more in the smaller metro areas and smaller towns--
Allentown, Pennsylvania; Dayton, Ohio; places like that--that
you haven't seen the new jobs replace the ones that have been
lost.
So there we have two choices. Number one, we can help
workers relocate from those locations to where the jobs are,
but not everybody is going to relocate; and number two, there
are things we can probably do to help generate more economic
activity in those locations. And I think we should be thinking
about some of those kinds of strategies.
Ms. Schakowsky. Well, that is really where I wanted to go.
How can we help assure that new opportunities are created by
automation and that they are accessible to all workers across
the country?
Mr. Holzer. So as I indicated in my comments I see three
broad strategies here essentially: education, unemployment
insurance/wage insurance, and also making sure the workers
share. When you are talking about these smaller towns in rural
areas internally, jobs aren't there at all. But even here, e-
commerce for instance has the potential to bring more jobs to
those areas, right. People can do coding and other kinds of e-
commerce work even when the physical product and locations
aren't there, or warehouses and trucking if these products are
going to be delivered to these smaller towns in rural areas at
least on the short term.
Before the drones and the autonomous vehicles there can be
some new job creation there as well. So I think we need to
think creatively about what kinds of jobs can be encouraged in
some of these locations and at what kinds of wages, again while
we help people have the mobility, some of them, to move to
where the job growth is.
Ms. Schakowsky. Thank you very much. I yield back.
Mr. Latta. Thank you very much. The gentlelady yields back
and the chair now recognizes the gentleman from Mississippi,
the vice chairman of the subcommittee, for 5 minutes.
Mr. Harper. Thank you, Mr. Chairman, and thanks to each of
you being here today on this very important and interesting
topic.
And Mr. Wynne, it is good to have you back. The last time
that you testified during the subcommittee's hearing on the
evolving use of drones, we talked about the UAS Center of
Excellence, its research, and FAA's road map for integrating
UAS in the national airspace system. Following up on that
discussion, what areas of research do you believe that the
ASSURE program should be focusing on to more rapidly implement
routine UAS package delivery system?
Mr. Wynne. The ASSURE program is very broad in its scope
doing a lot of different work that is really important to get
to more complex operations. I think that one of the biggest
challenges we need to solve is detect and avoid technologies.
Pilots today, myself included, if we are not in the clouds, it
is our responsibility to see and avoid other aircraft. That is
harder to do when you are not on the aircraft.
So we are developing technologies for see and avoid, well
clear standards, et cetera, et cetera, all of that work is
being led by the Center of Excellence. It is being distributed
through some of the best minds in the country and a lot of
collaboration going on. So I would choose that as probably one
of the seminal technologies that is being developed today.
Mr. Harper. OK. And obviously those that are flying private
aircraft, commercial, they have to know that something is in
that space, and then I guess the drones themselves need to be
able to realize that they are both in the same zone; is that
what you are referring to?
Mr. Wynne. That is exactly right, sir. We are talking about
smalls, today under 55 pounds, small UAS. Ultimately, there
will be aircraft of all sizes and there are aircraft of all
sizes already that fly in all areas of the airspace. So, there
are different kinds of rules above 18,000 feet in Class A
airspace than we would need below 400 feet where there is very
little traffic.
But the drones themselves need to be able to automatically
adjust to one another and they need to be able to adjust to
anything not performing in the system, or not participating in
the system such as an EMS helicopter or potentially an air
applicator for agricultural purposes.
Mr. Harper. We certainly know that the drone delivery
business idea is not just limited to the United States and we
have been advised that the ASSURE program has been contacted by
other countries asking for information on its research. How
important is regulatory, cross-border harmonization to the
drone delivery business?
Mr. Wynne. It is very important. The UTM system, unmanned
aircraft system traffic management that ultimately we are
developing and I think the United States has, through NASA and
the FAA, has been leading on, ICAO, the International Civil
Aviation authority or organization in Montreal, recently
launched an initiative with NASA. They recognize many member
states. The ICAO recognized that they don't want to do this all
themselves. So I think U.S. leadership is going to be critical
in getting this done, but clearly there will be contributions
from all over the world. This is a global phenomenon, this
technology, but I think we are now in a place where we can
lead.
Mr. Harper. Mr. Chidamber, do you see differences between
how the United States treats commercial drone delivery and how
drone deliveries are treated in other countries, and with that
is the U.S. ahead or behind other countries in the drone
marketplace?
Mr. Chidamber. On the regulation side, I think the FAA has
been slower than their equivalent authorities in other parts of
the world. I am thinking particularly of New Zealand where we
actually deliver Domino's Pizza in New Zealand, in Auckland,
actually. Approvals came faster. It was based on risk
assessment. Not just the aircraft, but who is running the
aircraft, what controls are there and so on.
So a risk-based analysis of approvals is probably what we
would require and I think the FAA is heading in that direction.
We would like to see them go faster towards that goal and I
think we will get there.
Mr. Harper. And you think the risk assessment is key to
this?
Mr. Chidamber. Absolutely, yes. I think the threat from
perhaps a hobbyist is greater than a legitimate operator who is
running a business and making deliveries for medicine or pizza
or whatever it might be. That person is going to be carrying
insurance, it is their brand. They have got to protect all of
that.
So a legitimate business which is operating under the
confines of the rules of the land are going to be quite
cognizant of all of these things and safety is a big issue for
them.
Mr. Harper. Thank you very much. My time has expired. I
yield back.
Mr. Latta. The gentleman yields back. The chair now
recognizes the gentleman from Texas for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I didn't know I was
coming up that quick. I want to thank both Chairman Latta and
Ranking Member Schakowsky for having this hearing today.
Ensuring the safety of our constituents has and will
continue to be our top priority. Although automation technology
has potential for massive benefits to society including the
disabled and elderly, like all groundbreaking technology there
are risks to some parts of society that need to be considered
and I look forward to talking about this with our experts.
Automated delivery of goods has been talked about as a way
to help mitigate the last mile problem, the inefficiency of
carrier trucks delivering goods short distances and individual
consumers. However, in cities like I represent in Houston, part
of which I represent, distance frequently can be quite long. My
first question I would like to ask the panel, do you see this
affecting the use of automated delivery technology and if so,
how? Any response? No?
Mr. Lehmann. I can take it. From Postmates' perspective we
believe that the short range deliveries are what we can conquer
first and where we can experiment first with our delivery
robots. They are predominantly designed for sidewalks.
Mr. Green. OK. Dr. Holzer, in your testimony you talk about
how disruptive technology has the potential to affect the labor
market, especially the trucking and delivery courier industry.
I would like to ask the whole panel their thoughts about what
industries would be disrupted by this technology and where they
see new labor trends developing as a result.
And let me just say, in the Houston area I have watched in
the last 4 years Amazon come in and build a huge warehouse near
our intercontinental airport because of air transport, but they
still have to get those packages out. And how would that
disrupt these labor trends? It seems like it would just expand
it unless they send out those drones from their warehouse,
using Amazon as an example.
Mr. Lehmann. I think there are two trends that are
important to distinguish here. On the one side you have clearly
a company like Amazon that gets more sophisticated with their
delivery infrastructure and they want to optimize for their hub
and spoke model that works very well for them, centralized
warehouses, fast delivery from these warehouses into
metropolitan areas.
But I believe it is important to recognize and I would like
the panel to recognize that there are companies out there that
specifically work on providing local retailers with
technologies to compete with these sorts of infrastructure.
Postmates for example allows local retailers to offer Amazon-
like services and deliveries right from their retail stores.
So we are envisioning a role that is a lot more
decentralized where you have a thriving local community. It is
a different approach than that of Amazon, but we believe in
thriving local economies and we believe in a healthy local
economy in communities.
Mr. Chidamber. May I add to that?
Mr. Green. Yes.
Mr. Chidamber. I completely agree with that statement,
because a small business area with a drone delivery capability
can compete more effectively with the large chains. So there is
a whole competitiveness issue here that new technology brings
to small players in the market.
The second point I want to make is about productivity,
which I think the good professor on my right hand side said
that earlier. Drones particularly can increase blue collar
productivity and a roofer, a delivery person can make more
deliveries per day doing those sorts of things. Their pay will
go up. It is the productivity problem that these things will
address and that is the important thing to remember.
Mr. Green. OK. Thank you, Mr. Chairman. I will yield back.
Mr. Latta. Thank you very much. The gentleman yields back
and the chair now recognizes the gentleman from New Jersey for
5 minutes.
Mr. Lance. Thank you very much, Mr. Chairman, and good
morning to the distinguished panel.
Mr. Lehmann, you state in your testimony with more than
65,000 active Postmates across 44 metropolitan markets covering
300 U.S. cities, our platform facilitates more than two million
deliveries per month. Does that mean you are currently in major
cities or are you in rural areas as well?
Mr. Lehmann. Both. We are in major metropolitan areas. We
would consider Los Angeles a major metropolitan area and then
we have suburbs that we cover as well. We are in the OC, yes.
Mr. Lance. Are you located throughout New Jersey, the state
I represent in Congress?
Mr. Lehmann. We are, yes.
Mr. Lance. Thank you.
To Flirtey, I am interested in your testimony. I was very
interested to hear that you conducted the first ever Shore to
Ship to Shore transport in New Jersey, and I appreciate your
highlighting the significance of the location considering what
occurred in 2012 regarding Superstorm Sandy, a devastating
event for the region of the country, part of which I represent.
Many lost electricity for between 1 and 2 weeks. Many of
the roads were impassable with fallen trees, power lines, and
debris. Had this technology been available then, how do you
think it would have helped to mitigate the prolonged hardships
many in New Jersey and in New York and Connecticut faced?
Mr. Chidamber. Thank you for that question. I think it
would have been invaluable if you had drones by the shore which
could, the roads were impassable, as you remember, to get to
the spot, but there were first responders who were already
there. And if there were people who required medical assistance
and they required medication of some sort, it would be tough
for them to get that medication bussed in or trucked in from
somewhere. Similarly, even simple things like potassium
permanganate to just keep the water clean or anything like
that, those things could have been brought from a boat
alongside, the waterway and a drone could have shipped it over.
So a number of things like that would have been possible,
so absolutely. I think drones would have been very, very
helpful if you had it deployed against Sandy, and I am so sorry
that we were not able to do it.
Mr. Lance. Thank you. Let's hope that this type of natural
disaster does not occur again, but obviously natural disasters
will occur and we are always interested in advanced technology.
Mr. Lehmann, in your testimony you mentioned sidewalk class
robotics. Can you please explain to me at least what you mean
by that?
Mr. Lehmann. Literally it is I would say everything under
the size of a refrigerator robot that is driving itself on the
sidewalks and streets of a city.
Mr. Lance. Thank you. This is a fascinating topic and I am
sure that as we progress the work of the distinguished members
of the panel will lead to greater protection and greater
service for the American people. I yield back the balance of my
time.
Mr. Latta. Thank you. The gentleman yields back and the
chair now recognizes for 5 minutes the gentleman from Vermont.
Mr. Welch. Thank you, Mr. Chairman. I thank the panel. I
want to ask your thoughts about privacy concerns. With all
these drones flying around they have a mission to do, maybe a
deliver a package, but they are also capable obviously of
collecting data. They are also capable of taking photographs.
They are also capable of doing things that some people may
regard as an invasion of their personal privacy.
Mr. Wynne, is that at all a concern in your organization?
Mr. Wynne. Of course, sir. Everyone is in favor of privacy.
The organization that I represent worked very, very hard in the
NTIA process for civil liberties groups under the initiative
from President Obama to discuss privacy to come up with
guidelines. Those guidelines are in effect for the industry.
I would say that in terms of delivery, the amount of data
that is required just to conduct that operation is probably
already, I would say creating opportunities for large chip
manufacturers to try and figure out how to process that data.
And so collecting additional data that is not related to the
mission is probably less of a concern, but all of the companies
involved are sensitive to the fact that they need to be focused
on whatever it is that they are doing.
Mr. Welch. So tell me, what do you think should be the
heart of guidelines to protect privacy? And this would be from
companies that are utilizing drones to be more productive, but
also private individuals using drones.
Mr. Wynne. Well, I think it pertains to the way we collect
data in general, and I use, in that process there were many
ubiquitous technologies that we are already looking at such as
facial readers, license plate readers, facial recognition
technology, et cetera, where the question is what are you doing
with that data; how is that data stored for what length of
time, et cetera, et cetera; how is it protected, so all of
those questions pertain.
As it relates to individual use of drones, clearly that is,
I think we are focusing on trying to educate people about safe
and responsible flight. Responsible flight means you are not
annoying people, you are not doing things that are already
against the law, or utilizing this technology to break the law
that pertain to the use of any other data collection.
Mr. Welch. OK. Mr. Lehmann, how about you? Do you see
privacy as a legitimate concern among the public as to needing
some regulation and guidelines that are required of folks using
drones for otherwise legitimate purposes?
Mr. Lehmann. Thank you for the question, Representative
Welch. We do not use drones currently, but on the platform, on
the Postmates platform itself, we obviously take data privacy
very seriously. I can give you an example. The entire
communication between you and the Postmate who would do the
delivery on his behalf is anonymous. The data, even the phone
numbers and the addresses of the addressee, for example, are
disguised so that no party can see the other party's private
information.
Mr. Welch. OK. Dr. Holzer, or Mr. Holzer?
Mr. Holzer. I am sorry, what question?
Mr. Welch. Well, your thoughts on privacy. That is a
concern that a lot of people contact a lot of us about. People
like the opportunities that drones can provide, but it also can
be an invasion of privacy if done improperly.
Mr. Holzer. In all honesty I haven't thought a lot about
the privacy implications so I will pass on that and defer to my
colleagues.
Mr. Welch. OK.
Mr. Chidamber. Privacy is a legitimate concern. Most people
don't want their privacy invaded. Drones and particularly
companies like ours which have drone delivery services
recognize that completely and regard the information, we keep
it only for the purposes of flight planning and those sorts of
things and it is completely encrypted. It is just another set
of files on a computer which are protected by encryption
algorithms and the usual things that go with it.
Mr. Welch. OK, thank you very much. I yield back.
Mr. Latta. The gentleman yields back and the chair now
recognizes the gentleman from Kentucky for 5 minutes.
Mr. Guthrie. Thank you. Thank you, Mr. Chairman, and I
thank the witnesses for being here.
There is a recently joined with Congressman Aguilar to form
a commercial e-commerce committee or caucus, and our districts
are centers for e-commerce. With UPS World Port next to my
district, a lot of people in my district are involved in e-
commerce. Amazon is a big player in Kentucky as well, among
others, so there is lots going on and it is exciting times.
Mr. Wynne, when we talk about package delivery with
unmanned vehicle systems, what areas of the country or where
particularly are these being really tested or do you see them
working? And there are actually some of them in progress right
now and working. Where do you see most of the commercial
testing being done and why do you think that is?
Mr. Wynne. Well, of course there are the test centers that
are around the country. I think, really, there are six test
centers where some of that is being done. There is a lot of
beyond visual line of sight being done in some of the test
centers because they are specifically set up to not only
conduct those missions, but also to collect the data that we
need in order to demonstrate that this can be done safely and
effectively.
I think where the initial deliveries will probably occur
will be in less risky airspace, less congested airspace. There
are some delivery companies already that are doing last mile
types of operations out in rural areas that save a little bit
of wear and tear on their trucks. So it is not just from a
warehouse to a delivery site, it might be from a truck to a
delivery site as well.
And again in those instances we might be out in very
uncongested airspace where again we are able to learn in that
environment and then ultimately bring the data that we have
collected to the FAA and demonstrate this can be done in more
complex airspace.
Mr. Guthrie. That is interesting, because you do think of
it being urban or suburban, but you could take it to parts of
my district that have a town or a city and deliver out from
there to--you are right. There are a lot of miles traveled to
get to certain areas of my district that are less populated. I
appreciate that.
So Mr. Lehmann, when we think about delivery service do we
think of food or product, or we talked about pharmaceuticals.
You indicate in your testimony that your platform offers much
more than that. Can you explain how your platform has helped
everyone from teachers to the elderly?
Mr. Lehmann. Thank you. It does that on both sides of the
platform. I will give you an example. We are delivering each
month from roughly 60,000 local merchants throughout the United
States. Around 70 percent of the platform is prepared food, but
you will find 30 percent of the two million deliveries across a
wide range of retail categories--supermarkets, hardware stores,
electronics, so customers really use the Postmates app for a
wide range of access to goods.
On the other hand, you have a very vibrant fleet of
Postmates. Everyone from an artist--you can be a Postmates in a
couple of minutes. If you had a postmates.com/fleet, you can
sign up. As long as you pass the background check you are good
to go. And that is how we enable additional income in this
country.
Mr. Guthrie. Well, thank you very much.
And Dr. Holzer, my other role in Congress I am the chairman
of the Subcommittee on Higher Ed and Workforce, and it is so
interesting some of the things you are talking about. What you
see over time is that automation has replaced routine work, but
now when I visit companies and move forth they are using
automation because they can't find work. So self-ordering at a
restaurant--you just see it all the time--unmanned, a lot of
trucking companies are interested in unmanned vehicles because
they can't find truck drivers.
And in areas that, maybe in restaurants it is lower income,
but I know in one area where I am starts in the mid-40s and it
is not like you have to go to school 2 years to get a degree.
It is a 4- or 5-week truck driving school. So you said the
policies need to be adopted on trainings there and that is what
we focus on.
What kind of things do we need to get the market working
where we have jobs that actually pay pretty well, but we can't
get people to get to the retraining to get into the workforce?
It is a big question, I know, in 48 seconds.
Mr. Holzer. OK. I think we need to make our higher ed
institutions, and here community colleges are very important,
make them more responsive to the labor market. As you know,
right now many community colleges, the public institutions, if
they get the same subsidy from the state no matter what, they
don't really have to worry about the labor market very much.
A lot of states are moving toward making that money more
conditional on outcomes. I would like to make them more
conditional on employment outcomes of the students there, along
with some extra resources to make sure that these institutions
for instance can cover the equipment costs, which are very
high, and all the support services you need like the career
counseling, labor market information, to sort of reduce the gap
between those institutions and the jobs.
Of course the other important strategy here is work-based
learning like apprenticeship, and I think we can do a lot more
to encourage, to help and assist and financially incentivize
more employers to create apprenticeships and other modes of
work-based learning for workers. But this way you are bringing
the labor market and the education closer together.
Mr. Guthrie. OK, thank you. My time has expired. I would
love to go further, but my time has expired.
Mr. Latta. Well, thank you very much. The gentleman's time
has expired and the chair now recognizes the gentleman from
California for 5 minutes.
Mr. Cardenas. OK. Thank you for not taking some of my time
away since Mr. Guthrie went over on his time. Thank you, Mr.
Chairman.
My first question is for Mr. Wynne. In your prepared
statement you cite an economic analysis by AUVSI that projects
that the expansion of UAS technology will create more than a
hundred thousand jobs--it is good to hear--and generate more
than $82 billion to the economy. Again, good news. Could you
describe some of the types of jobs that might be created?
Mr. Wynne. Well, let's start with the remote pilots. We
have certificated 40,000 of those since August of last year.
That is probably double the number of manned pilots that we
have certificated under Part 61, so we have a lot of people
coming to the workforce. Some of them are 4,000-hour pilots
from the military. Some of them are people that are straight
out of community college that are getting their training
through community colleges. So they are out there now flying
under Part 107. That is very, very good news.
The design elements of the solutions that are coming to
market through the air side alone, although we represent all
things unmanned, are just many, many of the different
technologies that my colleague from Flirtey mentioned are
converging here in a very, very explosive way, a very
positively explosively way. So there is engineering of course,
but there is an entire market that developed in a cell phone
arena that is worth $4 billion now for cell phone repair.
Imagine that you know with millions of drones what kind of
a market we are going to create for drone repair, for example,
for more expansive platforms. So there are many, many different
jobs out there that will essentially enable this technology
solution going forward.
Mr. Cardenas. Thank you. And when it comes to the pilots,
how long is the training roughly? What kind of training
required for them to be licensed to do this job?
Mr. Wynne. The only requirement for flying Part 107 today
is a knowledge-based test that is administered by the FAA. As a
Part 61 pilot and existing pilot, there is a slightly different
route that also involved demonstrating a certain amount of
knowledge.
What is happening in the marketplace is that groups that
are standing up their own training programs to give pilots
stick and rudder experience. Some of that is being done in our
test centers, for example. Some of our organizations that want
to fly over people recognize that there is additional risk
associated with that.
It can be done under waiver, in Part 107 under a waiver,
but they need to bring people to the table who know what to do
in certain circumstances where there is additional risk and how
to mitigate that risk, so those training programs are actually
being developed based on the operations that are required.
And in some instances, I will take a utility company. That
utility company might want to see additional training before
they are going to let someone fly near and do inspections of
one of their substations, for example. So we are in the process
in AUVSI of getting those remote pilots together and looking at
how do we develop that process of training pilots.
Mr. Cardenas. OK, thank you. Well, this next question goes
to all of you, whoever would like to answer it. Many national
infrastructure and transportation technology achievements have
been made possible in the past by a government investment, for
example, Congress's $25 billion authorization to construct an
Interstate Highway System.
So what is the role of government investment in the
advancement of automated technology, any kind of partnership
going on? Our university grants, I mean can we take credit for
something?
Mr. Holzer. I will only talk about the employment side.
Mr. Cardenas. OK.
Mr. Holzer. And all of the jobs that you mentioned will
require some new training and the jobs created actually are
much broader. And Mr. Wynne talked about the jobs directly
associated with this technology, but as prices and costs come
down the entire retail sector could expand. And as I said,
consumers will have more income to spend so they can spend that
economy wide.
So the whole range of jobs will require skilled workers and
public investments. We have got to make sure those public
investments are efficient and done well, but there is already a
large public role in higher education and workforce
development, and I think it was very important that that role
continue as we make those services more effective as well.
Mr. Wynne. And I will specifically say UTM is extremely
important, unmanned aircraft system, traffic management system.
That is going to require, it is going to require R&D. That R&D
is largely being done, initiated inside of NASA. It is now
being done in conjunction with the FAA and in collaboration
with industry.
But that requires some investment on the part of the
government. And it is much like when we established the air
traffic control system in the mid-'30s and late '30s, it is
going to require some leaning in by the government.
Mr. Chidamber. If I may, and I have two examples. Flirtey
was given space in the engineering lab at the University of
Reno when we couldn't afford rent and that was possible because
the people in the university and the people in the government
made that possible. And now we recruit people from a graduate
program and an undergraduate program in drone engineering from
that very school, so we have repaid it many times over already.
Similar situation in Virginia Tech, without Virginia Tech
we could not have done the first drone delivery in Wise County
in Virginia 2 years ago, and that is because Virginia Tech
supported us, helped us; helped us in testing. It was part of
the UAV test facilities that had been set up by the FAA and
because of all of that we were able to do what we did and grown
from there.
Mr. Cardenas. Thank you, Mr. Chairman.
Mr. Latta. Thank you very much. The gentleman's time has
expired. The chair now recognizes the gentleman from West
Virginia for 5 minutes.
Mr. McKinley. Thank you, Mr. Chairman, and thank you again
for another very interesting panel and discussion. You are
never short of vision on where you want to take this.
I am intrigued with it because I get, Mr. Lehmann, I can
remember 60 years ago we used to have couriers deliver
groceries in our small community, so it is not something new.
It is just you are apparently doing it in a more proficient
way. It didn't last very long, but it was an interesting
concept to have groceries delivered 60 years ago.
But I want to focus more on the consumer protection part of
this. I am curious from the panel what regulations or rules are
out there now to control what can be delivered using a drone or
a courier for that matter? Because I am interested in liability
with it and also for consumer protection because we have got a
drug problem in this country that is pretty severe. Not pretty
severe, it is severe.
Are you able now, under your rules are you able to deliver
products from one household to another using a courier or using
a drone? Is there a rule on that?
Mr. Lehmann. On the Postmates platform currently that is
not possible. The use of the couriers is tied to a purchase in
a retail store that we enable on our platform. But just as a
broader question, I believe that there are many better ways to
disguise the delivery of drugs, for example, than to do it on
platforms that use a lot of technology where it is difficult to
disguise the identities of everyone involved.
Mr. McKinley. But if this is the advent of what we are
going to see more of, do we have a role here for government on
consumer protection to develop some standards or things that
you cannot whether it is drugs, shipping across state lines
that maybe would be inappropriate, weapons that could be
shipped from it could be a retail store to a home and not being
under control; is that possible now that that could happen that
you could ship a weapon?
Mr. Lehmann. Not on the Postmates platform, our terms in
services wouldn't allow that. But we operate under the federal
and the state laws of each of the states, municipals, and
communities that we are operating in.
Mr. McKinley. Are there any standards by which you ship or
is that just something you all set? Are there standards set by
the government about what can be shipped by courier or by a
drone? Are there any standards out there by the government?
Mr. Chidamber. I do not believe there are any special, I
don't think there are any special new guidelines that have been
issued by the government, but I think the rules that apply to
all couriers, all other transportation mechanisms like FedEx or
UPS, all those things still apply.
Mr. McKinley. Let me find out more about that because I am
curious about that. I think the concept is very interesting. It
has been around for a long time, but with the advent of some of
the other activities that have been going on, the bad actors
out there, I am just concerned about it.
Now from also a standpoint of intrusion, would drones into
a community maybe per acre perhaps, is having access to five
drones in an acre that is acceptable? Is that something or is
it 20 drones per acre that come in? Where does it stop and
where do we intrude on people's privacy of sound, because these
things aren't necessarily quiet. So if we reach that point that
we have this proliferation, are we starting to have a problem
for people and their privacy in their residential area?
Mr. Chidamber. Would you like to take that first?
Mr. McKinley. What is the appropriate level of drone
activity in a community? Is it 10 per acre, 1 per acre?
Mr. Wynne. I think you are raising a very interesting
question, sir. I don't have an answer to that question because
we are nowhere near that level of adoption and I think it is
appropriate that we think about that. I will tell you this,
that you know as the driver of an electric vehicle that makes
zero noise, which I thought was good for my neighborhood, there
are people in the neighborhood who are concerned about me
running over their children because they won't hear it coming.
I haven't done that yet. I am not aware of that ever happening
with an electric vehicle.
And I can tell you that you know the noise that a drone
makes is largely a function of what the quality of its
propellers. So I look at this from the standpoint of I
represent an industry that is dedicated to getting this
technology into the mainstream and creating value for society
as well as economic business, economic opportunity for that
society, so I think you know that can't be done without it
being done sustainably. We have to consider the kinds of
questions that you are raising and I think it is very
appropriate that we do that.
Mr. McKinley. Well, thank you very much. I yield back.
Mr. Latta. Thank you. The gentleman yields back and the
chair now recognizes the gentleman from Florida for 5 minutes.
Mr. Bilirakis. Thank you. Thank you, Mr. Chairman. I
appreciate it.
Mr. Chidamber, in your testimony you mentioned the two-
prong mission of the FAA to promote safety in air commerce and
also to foster air commerce in the United States. So do you
believe the FAA is fulfilling its full mission?
Mr. Chidamber. I believe the FAA is doing remarkably well
in its safety mission, for sure. We have the safest, most
crowded airspace in the world, no question about that. Thanks
to the FAA they are making sure it is the safest place on the
planet to fly aircraft. On the part of air commerce, I think
that has not been of equal emphasis at this point. Certainly
with respect to unmanned air vehicles they are making clear
steps in that direction.
Mr. Bilirakis. What do they need to be doing, in your
opinion?
Mr. Chidamber. There are three basic areas where we would
like to see speedier approvals for trials and for eventual
dissemination of this sort of technology. We need to be able to
fly beyond visual line of sight. We need to be able to fly over
people. And we need to be able to have one operator control
multiple drones. Right now those three things are not in the
cards yet.
So gradually we have to get there in terms of allowing for
experimentation, proving, data gathering, and then eventual
release of those things as a standard operating procedure. So
those things need to happen.
Mr. Bilirakis. OK. You also mention in your testimony that
in June of 2016, Flirtey highlighted other benefits of its
commercial delivery system with the delivery of medical
supplies. Can you discuss the extent of the demonstration like
how many deliveries in how many hours, the maximum weight they
can handle, et cetera? If you can elaborate on that I would
appreciate it very much. It is very interesting, yes.
Mr. Chidamber. Sure. You are referring to the one in Cape
May, New Jersey, I take it?
Mr. Bilirakis. Yes, yes, yes.
Mr. Chidamber. What was happening was there was a boat off
on the water and from there a drone took off and landed on
land. There was a doctor who was collecting biological samples,
so the weight of it was not that much. We can carry up to about
7 or 8 pounds in terms of payload, so it was well underneath
that.
So the drone that takes off, goes back to the boat where--
it was a simulation, mind you. So presumably on the other side
tests can be performed, let's say, is somebody affected with
malaria and things of that nature and you could then ship back
medication which the doctor could then administer to the
patient and people like that. That was the simulation that was
done.
There are a few things here that were significant. Dr.
Amukele from Johns Hopkins, who conducted the medical practice
of it, he is interested in looking at blood samples and what
happens to blood samples if you ferry them by drone. Do they
spoil, do they change, is it affected? And we have been doing
tests on all of these sorts of things and we are happy to
report that a lot of medical samples can indeed be delivered
using drone without any detriment to their medical condition.
Mr. Bilirakis. Well, that is good news. What other ways in
examples could this benefit the public when natural disasters
or terrorist attacks may happen? Give me some other examples
how this would benefit the public.
Mr. Chidamber. Food, medicine, water, cell phones, any
number of things of that sort. The heartrending scenes that we
saw from Katrina when there were signs being painted on top of
roofs saying I need medicine, I don't have it and there is
water everywhere, nobody can get to that person. That sort of
stuff can be avoided. Whatever that person needs, if they are
in contact with someone a drone can bring it over to them
exactly where they are which is remarkable. I think we could
have saved lives in Hurricane Katrina for sure if you had
drones deployed there.
Mr. Bilirakis. And you said they could carry up to 7 to 8
pounds; is that right?
Mr. Chidamber. Yes, and the payloads are increasing every
day as the technology gets better.
Mr. Bilirakis. OK, so fascinating, thank you very much.
Well, let's see, I have 22 seconds, quickly, Mr. Chairman. Mr.
Wynne, can you please provide us with some example of what the
companies are doing as far as testing with regard to the
delivery, please?
Mr. Wynne. I mentioned that some of the delivery companies
are already doing deliveries from their trucks in rural areas,
so that is already happening. There are places in Africa where
medical supplies have been delivered. I don't remember if it
was Flirtey or not.
Mr. Chidamber. No, it wasn't.
Mr. Wynne. But a number of companies----
Mr. Chidamber. It was a competitor.
Mr. Wynne [continuing]. Have been doing that. I beg your
pardon.
[Laughter.]
Mr. Chidamber. A nameless competitor.
Mr. Wynne. I am in the unenviable position of being able to
root for everyone to win.
Mr. Bilirakis. It is always good to have competition to
bring the prices down.
Mr. Wynne. Yes, and I think right now those are the most
obvious. Probably the one that captures my attention is that we
have Global Hawk, which is a fairly sizeable platform that does
early detection of hurricanes off the east coast of Africa, 36-
hour endurance that literally flies out of Wallops and for
NOAA. So that is beyond visual line of sight and that is the
kind of work that can be done that quite literally, the Jim
Cantores of the world are really excited about.
Mr. Bilirakis. Very good. Thank you, Mr. Chairman. This is
a great hearing, I appreciate it. I yield back.
Mr. Latta. The gentleman's time has expired and he yields
back. The chair now recognizes the gentleman from Pennsylvania
for 5 minutes.
Mr. Costello. Thank you, Mr. Chairman.
Last session in Congress I had the distinction of serving
on the Transportation Committee, specifically the Aviation
Subcommittee, and paid close attention to the FAA regulations
as well as what I would say is a bit of a hands-off approach to
UAVs. And it has been very interesting to see just how rapidly
this sector of the economy has embraced UAVs as a delivery
system and I think very clearly that is going to continue. It
obviously raises questions related to jurisdiction and what
kind of regulatory framework we need, how much more intense it
might need to be or how light it should remain. So my questions
relate to the waivers granted by FAA for commercial use of
unmanned systems.
Mr. Wynne, I would ask you, related to the waiting line for
waivers, do you think it is still too long? Obviously you would
like to get same-day approval, but share with me your
experience there as well as how we might be able to streamline
authorizations, develop best practices--which I think is
emerging--and ensure that the FAA's designated test sites are
used effectively.
Mr. Wynne. We recently launched the Remote Pilots Council
to gather those pilots that are starting to fly under Part 107,
have been for the last 8 months. In nine cities around the
country we met with folks. The FAA participated in all of those
meetings which was a sign of their collaborative attitude.
And the biggest complaint of course, and that is what
pilots do when we get together and we complain about the FAA,
the biggest complaint, discussion point was how long it takes
to get a waiver. No one was surprised by that and the FAA is, I
think, making good efforts to try and reduce those times.
And sir, you will recall that we had the same problem with
333 exemptions back when that was the only way to fly
commercially, but what happened over time was the swim lanes as
it were what was required in order to get a waiver, what was
required to get a 333 exemption became clearer and clearer and
that process got almost batch processed after a while.
As I indicated in my written testimony, we really need to
automate this process. The FAA agrees we need to automate this
process and they are making best efforts to do that. The waiver
process should be much faster than it is today and as we go
forward I think we will be.
Mr. Costello. Do you want to compare that to other
countries? And Mr. Chidamber and anyone else, if you want to
weigh in after Mr. Wynne sort of comparatively looks at how
other countries address the issue.
Mr. Wynne. Anecdotally, there are places where it is less
restrictive in--but I think generally speaking that it not
necessarily in urban areas or congested airspace. So I think we
are doing fine under Part 107. I think if we have got the
ability to get the ability to do more things under waivers and
ultimately we can fly over people, which is the next stage in
the regulatory process we are going to continue to lead in this
country.
Mr. Chidamber. I agree with Mr. Wynne completely. The FAA
has made huge strides. When we did our first thing in 2015, we
placed our requirements with the FAA. I think it was in
February of 2015, it was only in June or July that we got the
waiver. Now it is much faster, all of these things are faster.
To address your question about how it is in other places, I
think Australia and New Zealand are the two countries which
have really been further ahead than everybody else in this
matter. When we did our test with Domino's in Auckland, I think
the waivers were gotten within 24 to 48 hours which is a lot
faster than what it is here, but so we should get faster as
well.
Mr. Costello. Help me understand, Mr. Wynne, major
companies have begun testing the capabilities of unmanned
systems to deliver products and packages, how big would the
products be or packages be? Look ahead 10 years, 20 years, at
some point in time, logically, it will manifest itself to the
maximum physical size. What do you think that looks like? What
do you think the future holds?
Mr. Wynne. I don't have a good way to answer that question
because Uber Elevate just came out with a platform that you
could get in and fly autonomously and they are wanting to
operationalize that in 5 years, which is taking this technology
and super-sizing it in some respects.
But I think I backup from an economics point of view and
say the vast majority, an astonishingly high percentage of
packages delivered in this country are under 5 pounds.
Congressman Price, when I was testifying before Appropriations
Committee on Transportation last week, asked me to speak to
congestion and capacity. We have enormous amounts of capacity
below 400 feet, whereas we have very little capacity on the
roads today.
Mr. Costello. Right.
Mr. Wynne. And with e-commerce continuing to advance there
will be more and more trucks on the road delivering 5 pounds or
less packages, which I think we could deliver when the airspace
is empty at night for noise abatement reasons. So I think that
it balances out at some point, but I think there is an enormous
opportunity just up to 5 pounds.
Mr. Costello. Thank you. I yield back.
Mr. Latta. Well, thank you very much. The gentleman yields
back the balance of his time. And seeing that there are no
other witnesses, or members asking questions to our panel
today, I want to thank you again for being with us today, again
very, very insightful.
And pursuant to committee rules, I remind all members that
they have 10 business days to submit additional questions for
the record and I ask that witnesses submit their response
within 10 business days upon receipt of those questions. And,
without objection, the subcommittee stands adjourned.
[Whereupon, at 11:55 a.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Greg Walden
Consumer demand drives businesses decisions all across the
country every single day. Consumers want everything faster,
cheaper, and on time. This is no small feat. Finding safe,
reliable, and efficient solutions will require the best and
brightest minds to marry cutting-edge technology, like sidewalk
delivery robots, with a service that families have been using
for decades to get pizza for game night. This hearing is a
chance to hear directly from companies building their business
plans around delivering the best product, service, and
experience to consumers.
Consumer safety is also top of mind as we hear about
delivery drones, robots, and even self-driving delivery cars.
Companies should be taking safety into account as part of their
brand, and there should be reasonable oversight for new
technologies. Creating an environment for safe new technologies
to flourish improves consumer choice.
In this hypercompetitive global marketplace, the consumer
is king. Regulators in Washington, D.C. do not know what the
next unicorn startup will be. It may be in the delivery space,
it may be in commercial trips to space. We do not know. But we
do know that if we do not allow for companies to responsibly
put their services to the ultimate test, the consumer, we are
guaranteeing failure for American innovators.
As we continue to highlight industries and promote policies
that will boost our economy and create more jobs here at home,
we will need to continue examining policies that may be holding
some of these business models back. The logistics behind these
demands are daunting for American businesses. I look forward to
hearing from the witnesses what challenges and obstacles their
businesses face in today's regulatory environment. I am also
interesting in hearing from the witnesses about the competitive
position of the U.S. marketplace in the global economy with
respect to these emerging delivery technologies.
The innovation agenda for this subcommittee sits on the
cutting edge of our economy. There will be challenges, but we
must keep our eyes on the horizon and open to the
possibilities. Thank you all for being here.