LICENCE TO FLY

WITH A NEW PERMIT FOR CARGO, B.C. DRONE COMPANY INDRO TAKES A STEP TOWARD HOME DELIVERIES

On B.C.'s Salt Spring Island, known as both a mecca for artisans and organic farmers and a community that embraces green technology, Philip Reece and his team from InDro Robotics run drone tests nearly every day that the weather co-operates. They've built a landing contraption on the back of a Land Rover Defender, which they drive around the island — about 30 kilometres from one end to the other — to practise precision landings, monitoring their aircraft's progress from a Mercedes Sprinter van they've converted into a mobile command unit.

“There's quite a lot of experimenting going on,” said Reece, “and, every fine day, you'll see us out in the fields testing these kinds of things.”

Late last year, InDro achieved an industry first: The Canadian Transportation Agency awarded it the first licence granted to a drone company to fly cargo in Canada. It was the latest in a series of promising steps for the company, which had already conducted trials with big-name partners including Rogers and Canada Post. The licence gives it the ability to push its technology further, with an eye to a future that includes regular commercial deliveries to people's homes — and a public offering.

Retailers around the world are working toward drone deliveries. Amazon revealed its plan to ship goods to customers via drone seven years ago, and completed its first Prime Air delivery in late 2016. Walmart and British grocery giant Tesco announced major pilot projects on the same day last September. And on Monday, even Pizza Hut revealed it plans to try delivering hot pizza pies to customers in Israel this June.

Regulators are starting to catch up to companies' ambitions. Last week, the U.S. Federal Aviation Administration approved Massachusetts-based American Robotics for automated low-altitude drone flights in rural areas. The first-of-itskind approval “is key to making drones a widespread reality in our industry. This is a game changer,” said Lance Ruppert, director of agronomy marketing and technology at Growmark, a U.S. grower co-operative, in a statement. In August 2020, the FAA also designated Amazon an air carrier, similar to InDro's recent approval, for a trial program.

The American Robotics announcement, “is exactly where we are heading and what we have been working on, more autonomous abilities for drones operating in shared airspace,” Reece said. The announcement “gives me another example to point at as to why Canada needs to keep pushing the tech, use and regulations to hold our position in the industry.”

Reece, who immigrated to Canada from London in 2001, founded InDro in 2014, and the company completed a stint at SFU Venture Labs about two years ago. He previously owned a small airline, Salt Spring Air, which was acquired by Harbour Air in 2015. That experience helped him identify an opportunity for drones. He “noticed many of the industry flights for clients in construction, mining forestry and wildlife could be carried out by UAVs,” according to InDro's website. While the company is now headquartered in Vancouver, its research and development team is still based on Salt Spring, where the company was founded. Reece still lives there, appreciating the feeling of remoteness, while in reality living a short flight from Vancouver.

InDro's licence from the CTA lets it carry items between any two points in Canada, but the distance of those trips, and the weight InDro's drones are allowed to carry, are subject to separate approval from Transport Canada. The federal government department has so far given InDro permission to fly a load of 25 kilograms (including the drone) up to 56 kilometres round trip. The company is currently working on demonstrating its ability to fly 400 kilometres round trip, as well as operate a drone with cargo weighing a total of 55 kilograms together, said Reece.

Reece anticipates Transport Canada will grant it those licences some time this year. The pandemic has helped speed things along, he said. “The airspace is a lot less trafficked and the need for remote delivery is definitely increasing,” he said. Regulator approvals are moving in a similar direction, he believes.

“Transport Canada very keen to say that they always like to do a crawl, walk, run approach. And, I think we're definitely out of the crawl, we're well into the walk and we're coming forward to the run now,” he said, noting it's unlikely the department will let InDro do both simultaneously — carry the heavier weights while travelling the farther distance — until 2022. Transport Canada did not respond to a request for comment.

InDro applied for the drone licence from the CTA for “flexibility,” Reece said. Companies without a licence can only operate on a trial basis, or by partnering with an air carrier. (Vaughan, Ont.-based Drone Delivery Canada, for example, has partnered with Air Canada for its cargo drone-delivery service.) Working independently means the company isn't restricted by the airline's routes and burdened by its overhead, Reece said, which hopefully results in faster organization of services and lower prices. He sees InDro's independence as a competitive advantage for securing business.

For now, InDro is working within the constraints of its licences, but has already demonstrated an ability to forge partnerships with big clients. In 2019, the company conducted trials with Canada Post and London Drugs. They completed Canada's first drone delivery of pharmaceuticals from a London Drugs pharmacy location in Duncan, B.C. to Salt Spring Island, a six-kilometre, beyond-visual-line-of-sight flight, meaning the pilot can't see the drone for the entirety of the flight. The company has also relied on Rogers's 5G network to conduct test flights to a remote B.C. community. InDro continues to work with Rogers, Reece said, moving drones to more missions. It also acts as a technical advisor for drone-related issues for Canada Post, runs pilot programs with the mail delivery service and is building out possible future solutions.

InDro is for now focusing its delivery efforts on urgent items, such as medical supplies and prescriptions, and high-value items, including computer parts. The company currently has two ongoing projects, Reece said. The first, which is on pause due to COVID-19, flies items sold at a London Drugs location in Duncan to Penelakut Island, slightly northwest of Salt Spring Island. The second, which the company is currently setting up, delivers items from two different locations at the University of British Columbia's Vancouver campus to a location elsewhere on campus where the company has installed a cluster box — essentially a safe location for a drone to land and drop off a package.

These types of communal pickup points are an interim step ahead of home delivery, Reece said. “Before you end up getting deliveries to your home … we'll see deliveries to a point, to a location,” he said. Consumers can expect to start being able to pick up drone deliveries from such neighbourhood hubs this year or next, he estimated.

But Reece believes home delivery is still years away due to several major obstacles.

For one, he said, “The technology still has to come along a little bit more.” Drones need to be able to assess airspace better on longer-distance flights, for example.

The tech remains the biggest obstacle, said Kate Klassen, co-founder of Coastal Drone, an education service for drone pilots. She and Reece also sit on the board of Unmanned Systems Canada, the national industry association for those in the remotely piloted- and unmanned-vehicle sector. Drones are not yet capable of navigating hazards like tree branches, power lines or a dangling string of Christmas lights, she said. “Those kinds of hazards that you can't really predict or the ability to view those things on the drone? It's weight. So then you're carrying less capacity than what you may want to be able to carry,” she said. Battery power further limits drones, so they can't necessarily go the distance needed, carrying the desired weight with the technology onboard to conduct the flight safely, she said. “I think you're running into kind of one of those triangles where you get to pick two of the three. You don't get all three options right now.”

Regulators need to keep pace with the technology as it develops, added Reece. “You can't get the investment to develop the technology unless the regulator then going to say you can't use.”

Finally, the public must accept the physical and audible intrusion of drones. That is in part why InDro has concentrated on delivering medical and emergency supplies first, Reece said. It's easier for people to allow drones when they know it is carrying a life-saving EpiPen, for example, rather than a new pair of sneakers.

For now, InDro remains focused on growing its operations. The company has so far not raised venture funding, which Reece says it's been able to avoid thanks to its commercial contracts.

“We're hoping to stay in this mode of continuing to raise funding through our clients and projects,” he said, noting that allows him not to give up any equity in his company. “And, at some stage in the future, you know, as the market opens up, we … do have an eye to going public.”

InDro needs to hit a few milestones before that will happen, he said. The company's 22 employees are mostly based in Canada with some in the U.S., and Reece wants to expand InDro's American operations first. He also wants to hold the licences for flying 200-kilometre trips one way with a weight of more than 25 kilograms. He anticipates the company will meet these metrics no earlier than 2022.

“But who knows? If we continue to get private investment or private support from these companies, then we'll hold out until we're a bigger company.”

DAVID KAWAI InDro is for now focusing its delivery efforts on urgent items such as medical supplies and prescriptions, and high-value items including computer parts.