Amazon's drone delivery

"Amazon plans drone delivery. Will Feds approve?"

Amazon may eventually have drones deliver everything from shoes to consumer electronics. The FAA has been working to integrate civilian drones into US airspace, but that could take awhile.

by

Peter Grier

December 2nd, 2013

Decoder Wire

Amazon CEO Jeff Bezos on Sunday said his firm is working on ways to deliver small packages via drones. That’s right: Amazon “Prime Air” may eventually have thousands of robot flying machines buzzing through neighborhoods across America, dropping off everything from shoes to consumer electronics.

At least, that’s the vision Mr. Bezos outlined on “60 Minutes.”

“It will work, and it will happen, and it’s gonna be a lot of fun,” he told correspondent Charlie Rose.

Well, we would not wager against Amazon, given its relentless march toward US retail dominance. And it’s easy to see how the concept would work, in a technical sort of way: Small "octocopter" unmanned aerial vehicles (UAVs) capable of carrying five pounds or so already exist.

The “fun,” however, may be in the eye of the beholder. In urban areas, swooping octocopters might seem a hazard, pigeons with gas-powered propellers. In rural areas, they might be targets for people bored of hunting deer.

“Amazon fine print: ‘Drone delivery unavailable outside urban areas during hunting season,’ ” RedState's Erick Erickson tweeted on Monday.

And the real problem here might be the Feds. The Federal Aviation Administration is working to integrate civilian drones into US airspace. That’s unlikely to be a speedy process. Amazon’s realistic drone-delivery start date might be 2025 or beyond.

That’s if Amazon can satisfy the FAA’s safety concerns at all. The Amazon concept brings drones into closer contact with people than other civilian UAV uses currently under FAA study. Will it be possible to avoid packages dropped from a hundred feet up, buzzing drones snagged on power lines, out-of-control drones plummeting into bedroom windows? Plus, what about privacy and national security concerns?

“The safe integration of unmanned aircraft into the [national airspace] is a significant challenge,” the FAA notes in the conclusion of its road map for approval of civilian drone use.

Of course, civilians already fly drones in America. They’re used for everything from land-use planning to photography. Drone development is a big industry. Some 50 companies are working on 150 systems right now. Civilian UAV sales may hit $6 billion by 2016.

But these are generally one-time uses. Many are subject to restrictions, such as a requirement that operators maintain sight of the UAV. Amazon wants something much larger, a sort of UAV cargo airline across the United States.

Currently, the FAA is supposed to finalize drone regulations by 2015. It has already missed some deadlines, however, and the agency may not meet that goal. Furthermore, look at the fine print in the FAA road map, and it’s apparent that Amazon’s plan probably falls into the FAA’’s long-term outlook – meaning it couldn’t gain approval until 2022 or 2026.

The FAA’s concept list of drone uses doesn’t include civilian package delivery, for one thing. (It does contain cargo carriage, but that’s for delivery from one airport to another.)

A perusal of the road map shows that the FAA intends to develop security vetting procedures for UAV personnel. That means Amazon's ground-based UAV pilots would have to undergo some Fed-approved training. The FAA also is working on airworthiness rules. In others words, it intends to provide guidelines for the design and testing of robust UAV structures, as it does now for manned aircraft. That means the nifty Amazon drone seen buzzing on “60 Minutes” might have to reengineered.

And the FAA intends for civilian UAVs to include sense-and-avoid technology to ensure they don’t hit airliners or one another. That’s something that won’t be perfected for years, the agency acknowledges.

“Although research will continue, fully certified [UAV] collision avoidance solutions may not be feasible until the long-term and are deemed to be a necessary component for full [UAV national airspace] integration,” the FAA road map says.

The bottom line here is that Amazon Prime Air might not be operational until Miley Cyrus is playing on oldies radio. That’s led some critics to charge that unveiling the plan on “60 Minutes” at the beginning of the holiday shopping season was really a well-planned publicity stunt.

“[I]t’s all hot air and baloney,” writes James Ball of the Guardian.

They knew better...money replaced ethics in the UK

"Starbucks, Amazon and Google to face UK lawmakers over tax"

by

Tom Bergin

November 12th, 2012

REUTERS

UK lawmakers will quiz executives of Starbucks, Google and Amazon on Monday about how they have managed to pay only small amounts of tax in Britain while racking up billions of dollars worth of sales here.

The Public Accounts Committee (PAC), which is charged with monitoring government financial affairs, has invited the companies to give evidence amid mounting public and political concern about tax avoidance by big international companies.

"It is hard for the ordinary person to believe it's fair," said Margaret Hodge, a member of parliament for the opposition Labour party and chairman of PAC.

"It makes people incredibly angry in the current fiscal climate," she added, in reference to the austerity measures which large budget deficits have forced on the UK, and other countries.

Britain and Germany last week announced plans to push the Group of 20 economic powers to make multinational companies pay their "fair share" of taxes following reports of large firms exploiting loopholes to avoid taxes.

A Reuters report last month showed that Starbucks had paid no corporation, or income, tax in the UK in the past three years.

The world's biggest coffee chain paid only 8.6 million pounds ($13.74 million) in total UK tax over 13 years during which it recorded sales of 3.1 billion pounds.

Campaign group UK Uncut, which is opposed to government austerity measures, and which has organized protests against British telecoms operator Vodafone and pharmacist Boots over their tax practices, said in a statement on Monday that they planned to target Starbucks.

Starbucks said it followed the tax rules in every country where it operates and sought to pay its fair share of taxes.

"We are committed to being transparent on this issue and look forward to appearing before this committee," a spokeswoman said.

Starbucks Chief Financial Officer Troy Alstead will give evidence to the committee, as will Matt Brittin, Chief Executive Officer of Google UK, and Andrew Cecil, Brussels-based Director of Public Policy for Amazon, a PAC spokesman said.

Google's filings show it had $4 billion of sales in the UK last year, but despite having a group-wide profit margin of 33 percent, its main UK unit had a tax charge of just 3.4 million pounds in 2011.

The company avoids UK tax by channeling non-U.S. sales via an Irish unit, an arrangement that allowed it to pay taxes at a rate of 3.2 percent on non-U.S. profits. Amazon's main UK unit paid less than 1 million pounds in income tax last year. The company had UK sales worth $5.3-7.2 billion, filings show.

Amazon avoids UK taxes by reporting European sales through a Luxembourg-based unit. This structure allowed it to pay a tax rate of 11 percent on foreign profits last year - less than half the average corporate income tax rate in its major markets.

Google declined to comment. Amazon did not respond to requests for comment.

Hodge and former financial services minister Paul Myners told the Sunday Telegraph newspaper that the government should consider a new revenue-based tax to ensure profits from UK sales didn't go offshore.

"Starbucks man faces a grand roasting"

Coffee chain will attempt to explain why its UK tax bill is so small to members of parliament

November 10th, 2012
   
The Observer

Before becoming the chief apologist for Starbucks' microscopic UK tax bill, Kris Engskov was Bill Clinton's flunky.

The coffee chain's UK boss was close enough to the former president to be twice called in front of a grand jury during the Monica Lewinsky scandal, and those grillings look like just the type of experience needed tomorrow, when the coffee chain attempts to justify itself in front of members of parliament probing the taxation of multinational businesses.

It would have been useful, that is, before Engskov ducked the grilling and left Troy Alstead, the group's chief financial officer, to appear by himself (apparently, Google and Amazon are also sending one witness each).

Alstead, of course, is in town after Starbucks got itself into a spot of bother last month when it emerged that it had paid just £8.6m in corporation tax since launching here in 1998 – which looks rather mean as the company's last annual report states: "our Canada, Japan, UK, and China [businesses] account for a significant portion of ... earnings".

Alstead will attempt to fool MPs by spinning that the firm has "paid" £160m in UK taxes over the past three years, even though the line looks weaker than one of its Americanos: £87m of that was VAT, collected by Starbucks but, er, paid by its customers.